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Compute the amount of Bailey pension expense

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Problem - Pension Expense Bailey Company has had a defined benefit pension plan for several years. At the end of 2019, Bailey's actuary provided the following information for 2019 regarding the pension plan: (1) service cost, $115,000; (2) expected return on plan assets, $14,000; (3) amortization of net loss, $2,000; (4) interest cost on projected benefit obligation, $16,000; and (5) amortization of prior service cost, $4,000. Bailey decides to fund an amount at the end of 2019 equal to its pension expense.

Required -

1. Compute the amount of Bailey's pension expense for 2019 and prepare the related journal entry.

2. If Bailey had decided to fund an amount less than the 2019 pension expense, how would the company's balance sheet be affected?

Reference no: EM132891361

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