Question

III. Comprehensive Pension Problem

Given the following pension reconciliation from the financial statement notes of Company P at December 31, 2016:

Projected benefit obligation           $     330,000

Fair value of plan assets                       270,000

Also, the following amounts are reported in Other Comprehensive Income in the 2016 Statement of Stockholders’ Equity:

Unamortized prior service cost                           90,000 debit

Unrecognized net loss                                        39,000 debit

Additional information for 2017:

                 

1. Service costs for 2017 were calculated to be $45,000.
2. The settlement rate (for interest cost) on the PBO was 7%.
3. The expected return on the plan assets was 8%.

4.     During 2017, Company P contributed $65,000 to the plan.         

5.     The prior service costs are being amortized over the remaining years of service of 5 years.

6.     The average remaining service life for amortizing unrecognized gains and losses (after application of the corridor) is 10 years.

7.     The pension plan paid benefits to retirees totaling $44,000 during 2017.

8.     The actuary calculated the following balances at the end of 2017:

PBO                                       = $ 363,800

FVPA                                     =     321,000

From the information above, complete on the answer sheet: (1) the Pension Schedules, (2) the journal entry for 2017, and (3) the T-accounts. Include proper titles for each of the missing items in the pension schedules. Abbreviations are acceptable, both here, and on the exam.

III. Comprehensive Pension Problem

Pension Expense Components:

__________________                        ___________

__________________                        ___________

__________________                        ___________

__________________                        ___________

__________________                        ___________

Pension Expense                               ___________

PBO                                                                FVPA

Beginning                   ___________              Beginning                   ___________

_____________          ___________              ______________        ___________

_____________          ___________              ______________        ___________

_____________          ___________              ______________        ___________

=End. Unadjusted       ___________              =Ending Unadjusted   ___________

______________        ___________              _______________      ___________

= Ending Reported     ___________              =Ending Reported      ___________

Journal Entry:

Ending Balances:

Pension Asset Liab.          OCI – U PSC                   OCI-U Net G/

Answer 1