(L.O. 2 and 3) On January 1, 2017 Bengston Company amended its pension plan to provide...

(L.O. 2 and 3) On January 1, 2017 Bengston Company amended its pension plan to provide greater benefits to its employees. The amendment to the plan resulted in prior service costs with a present value of $90,000. Also, the following facts relate to the pension plan for 2017

Projected benefit obligation, 12/31/16 $175,000

Plan assets, 12/31/16 171,000
Prior service cost, 1/1/17 90,000
Annual service cost, 2017 18,000

Settlement rate, 2017 12%

Actual return on plan assets 18,500
Employer’s contribution, 2017 42,000
Benefits paid to retirees, 2017 12,000
Balance in pension asset/liability, 12/31/16 4,000
Amortization of prior service cost using the yearsofservice method 23,800

Instructions:

a. Based upon the information presented above prepare a pension worksheet for Bengston Company for 2017.

b.Record the journal entry to formally recognize the pension expense for 2017.

c.Prepare the reconciliation schedule for December 31, 2017.

Expert Solution

For convention Negative Sign is for Debit and Positive Sign is for Credit.

jeff jeffy answered 8 months ago

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