Question

Kollar Company, a publicly traded corporation, has a defined benefit pension plan. Pension Information concerning this plan for the fiscal year 2017 is presented below: Information provided by the plan’s actuary:

• DBO as of December 31, 2016 $1,800,000

• Past service reduction from plan amendment on January 2, 2017 300,000

• Current service costs for 2017 520,000 • Payments to retirees in 2017 400,000

• Changes in actuarial assumptions at December 31, 2017 resulting in an actuarial loss 45,000

• Discount rate used on DBO for 2017 6%

Information provided by the plan’s trustee:

• Plan asset balance on January 1, 2017 $1,600,000

• 2017 contributions 540,000

• 2017 actual return on plan assets 180,000

• Expected long-term rate of return on plan assets 6%

Required: Write neatly and show all your work.

(a) Prepare a continuity of all pension-related accounts for the year 2017, using either the worksheet format or the continuity format, at your preference. (b) Prepare the pension-related journal entry(ies) at December 31, 2017. (c) Identify the plan’s funded status. (d) How would this plan be shown on the December 31, 2017 Statement of Financial Position? (e) For this part, assume that Lumnar uses ASPE. Provide the note disclosure at December 31, 2017.

Answer 1

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