Reference no: EM132960760

Ricardo and Associates, LLC, is a full-service consulting practice specializing in human resources. The company has 30 full time employees and regarding retirement provides both a defined contribution option or a defined benefit option (at reduced salary) to its employees.

The information for 2022 related to the defined benefit plan is as follows:

Service Cost             55,000
Settlement Rate          10%
Expected Return Rate    12%
Actual Return             25,000
PBO 1/1/22               530,000
Plan Assets 1/1/22       545,000
Prior Service Cost 12/31/21  70,000
Prior Service Cost implemented in 2022  10,000
ABO 1/1/22                                     545,000
ABO 12/31/22                                  620,000
Amortization of PSC                             8,300
Unrecognized loss 12/31/21                     67,000
Average service life                              20 years
Contributions made                               35,000
Benefits paid                                       12,500

Problem 1: Find each of the following:

a. Pension Expense for 2022

b. PBO at 12/31/2022

c. Plan Assets at 12/31/2022

d. Is there a Pension Asset or Pension Liability at 12/31/22

e. What is the amount of the Pension Asset or Pension Liability at 12/31/22

f. Amount recognized in 2022 due to the corridor test

g. Amount by which AOCI changed during 2022

h. AOCI balance 12/31/2022

i. Is this pension plan over or underfunded?

j. By how much is the pension plan over or underfunded?

k. Journal entry made related to pensions in 2022