Question

The following information is available for the pension plan of Flounder Company for the year 2020.

Actual and expected return on plan assets		$ 14,200
Benefits paid to retirees		39,300
Contributions (funding)		92,900
Interest/discount rate		10	%
Prior service cost amortization		7,500
Projected benefit obligation, January 1, 2020		508,000
Service cost		56,900

(a) Compute pension expense for the year 2020.

(b) Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.
)

Answer 1

a
Service cost	56900
Interest cost	50800	=508000*10%
Actual and expected return on plan assets	(14200)
Prior service cost amortization	7500
Pension expense for 2020	101000
b
	Debit	Credit
Pension Expense	101000
Cash		92900
Pension Asset/Liability		600
Other Comprehensive Income (PSC)		7500