Question

You are given the following information regarding a defined benefit pension plan sponsored by Walters Company:

Description	2019
Projected benefit obligation (PBO) at the beginning of the year	$2,000
Plan assets at the beginning of the year (at fair value which is assumed to equal the market related asset value)	1,500
Accumulated Other Comprehensive Income (Related to Pensions) at the beginning of the year	-0-
Service cost for the year	420
Settlement rate	5%
Expected return on plan assets	8%
Actual return on plan assets	160
Contributions for the year	350
Benefit payments for the year	600
Prior service costs granted on 1/1/2019	900
Amortization rate for prior service costs	10%
Average remaining service life of employee base (ARSL)	20 years

REQUIRED:

a) Determine the pension expense for the year.

b) Determine the ending balance of the Projected Benefit Obligation

c) Determine the ending balance of the Plan Assets

d) Compute the balance of unrecognized prior service costs and cumulative unrecognized gain or loss.

e) Prepare the journal entry to record the pension expense for the year.

f) Determine the ending balance of the GAAP pension liability and AOCI related to unrecognized pension costs.

g) What is the amount of amortization required as a result of the corridor test at the beginning of 2020?

Answer 1