Indicate the pension related amounts that would be reported

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1. (Pension Expense, Journal Entries, Statement Presentation) Ferrari 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, 2010. The service cost component of pension expense for employee services rendered in the current year amounted to $77,000 and the amortization of prior service cost was $120,000. The company's actual funding (contributions) of the plan in 2010 amounted to $250,000. 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 $1,200,000 on January 1, 2010. Assume no benefits paid in 2010. 

(a) Determine the amounts of the components of pension expense that should be recognized by the company in 2010.

(b) Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2010.

(c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Ferrari Company for the year 2010. 

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Reference no: EM131109407

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