Question

1. Carolina Consulting Company has a defined benefit pension plan. The following pension-related data were available for the current calendar year:

PBO:
Balance, Jan. 1	$	242,000
Service cost		43,000
Interest cost (5% discount rate)		12,100
Gain from changes in actuarial assumptions in 2016		(5,200)
Benefits paid to retirees		(22,000)
Balance, Dec. 31	$	269,900

Plan assets:
Balance, Jan.1	$	252,000
Actual return (expected return was $22,700)		20,000
Contributions		37,000
Benefits paid		(22,000)
Balance, Dec. 31	$	287,000

January 1, 2016, balances:
Prior service cost–AOCI (amortization $4,170/yr.)	4,170
Net gain–AOCI (amortization, if any, over 15 years)	41,700
There were no other relevant data.

1. Calculate the 2016 pension expense.     

2. Prepare the 2016 journal entries to record pension expense

3. Prepare the 2016 journal entries to record funding.

4.Prepare any journal entries to record any 2016 gains or losses

5. Fill in the following spreadsheet :

	PBO	Plan Assets	Prior Service cost -AOCI	Net (gain) -AOCI	Pension Expense	Cash	Pension Asset (Liability)
Beginning balance, 01/01/2016
Service cost
Interest cost
Expected return on assets
Gain/loss on assets
Amortization of:
Prior service cost
Net gain/loss
Loss (gain) on PBO
Contributions to fund
Retiree benefits paid
Ending balance, 12/31/2016

Answer 1

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