Reference no: EM132326638

Question

Buffalo Company received the following selected information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2017.

                                      January 1, 2017   December 31, 2017

Projected benefit obligation       $1,498,000  $1,526,000

Market-related and fair value of plan assets   784,000  1,116,400

Accumulated benefit obligation        1,572,000  1,691,700

Accumulated OCI (G/L)-Net gain0(199,800)

The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $119,700.

The company's actual funding (contributions) of the plan in 2017 amounted to $254,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%.

Accumulated other comprehensive income (PSC) had a balance of $1,197,000 on January 1, 2017. Assume no benefits paid in 2017.

Determine the amounts of the components of pension expense that should be recognized by the company in 2017. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2017.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Buffalo Company for the year 2017.