Solution-Compute the amount of pension expense to be

Compute the amount of pension expense to be reported

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Reference no: EM131713063

Problem - Presented below is information related to Stage Department Stores, Inc. pension plan for 2016.

Service cost	$55,000
Funding contribution for 2016	53,000
Settlement rate used in actuarial computation	8%
Expected return on plan assets	7%
Actual return on plan assets	8%
Amortization of PSC (due to benefit increase)	90,000
Projected benefit obligation (at beginning of period)	540,000
Fair value of plan assets (at beginning of period)	360,000
Accumulated benefit obligation at December 31	739,600
Average remaining service life of all employees	20 years
Vested benefit obligation at December 31	768,000

At the beginning of 2016, the actuary determines that the retirement period for all retirees will increase by an average of 2 years, increasing the projected benefit obligation by $129,000.

Instructions

(a) Compute the amount of pension expense to be reported for 2016. (Show computations.)

(b) Prepare the journal entry to record pension expense and the employer's contribution for 2016.

Reference no: EM131713063

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Compute the amount of pension expense to be reported

Reference no: EM131713063

Reference no: EM131713063

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