Question

Question 2 Presented below is information related to Crane Department Stores, Inc. pension plan for 2021. Accumulated benefit obligation (at year-end) $620,000 Service cost 560,000 Funding contribution for 2021 500,000 Settlement rate used in actuarial computation 9% Expected return on plan assets 8% Amortization of PSC (due to benefit increase) 102,000 Amortization of net gains 50,000 Projected benefit obligation (at beginning of period) 490,000 Fair value of plan assets (at beginning of period) 380,000

Compute the amount of pension expense to be reported for 2021. Pension expense $ SHOW LIST OF ACCOUNTS

Prepare the journal entry to record pension expense and the employer's contribution for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Answer 1

a.)	Service Cost	560,000
	Add: Interest cost	44,100	(490,000 x 9% )
	Less :Expected return on plan assets	30,400	(380,000 x 8% )
	Add:Amortization of PSC (due to benefit increase)	102,000
	Less :Amortization of net gains	50,000
	Pension Expense	$ 625,700
b.)	Account Titles	Debit $	Credit $
	Pension Expense	625,700
	Other Comprehensive Income (G/L)	500,000
	Cash ( Balancing Figure )		455,700
	Other Comprehensive Income (PSC		50,000
	Pension Asset/Liability		620,000