Question

Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $489,900 Projected benefit obligation 616,700 Pension asset/liability 126,800 Accumulated OCI (PSC) 95,600 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $86,900 Settlement rate, 9% Actual return on plan assets 57,100 Amortization of prior service cost 19,500 Expected return on plan assets 54,000 Unexpected loss from change in projected benefit obligation,    due to change in actuarial predictions 77,700 Contributions 103,700 Benefits paid retirees 88,900

Using the data above, compute pension expense for Teal Corp. for the year 2020 by preparing a pension worksheet. (Enter all amounts as positive.)

Prepare the journal entry for pension expense for 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

	Annual		Pension	Prior		Projected
	Pension		Asset/	service	Gain/	Benefit	Plan
	Expense	Cash	Liability	Cost	Loss	Obligation	Assets
Balance, Jan 1, 2020			(126,800)	95,600		(616,700)	489,900
Service Cost	86,900					(86,900)
Interest Cost	55,503					(55,503)
Actual/Expected Return	(57,100)						57,100
Return Adjustment (57,100 - 54,000)	3,100				(3,100)
Amortization Prior service cost	19,500			(19,500)
Loss from change in PBO					77,700	(77,700)
Contribution		(103,700)					103,700
Benefit Paid						88,900	(88,900)
Journal Entry	107,903	(103,700)	(59,303)	(19,500)	74,600
Balance., Dec. 31, 2020	-	-	(186,103)	76,100	74,600	(747,903)	561,800
Pension Expense	107,903
OCI Gain/Loss.	74,600
Cash		103,700
Pension Asset/Liability		59,303
Other Comprehensive Income (PSC)		19,500