Journal entries to record the pension expense

Reference no: EM13124968

U.S. Metal, Inc reported the following balances in its financial statements and disclosure notes at december 31, 2006. Plan assets $400,000 and Projected benefit obligation $320,000. U.S.M.'s actuary determined that 2007 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest rate is 5%. U.S.M contributed $120,000 to the pension fund at the end of 2007, and retirees were paid $44,000 from plan assets. Determine the following amounts at the end of 2007.

1. Pension Expense

2. Projected benefit obligation

3. Plan assets

4. Pension asset/liability

5. Prepare journal entries to record the pension expense and funding of plan assets to verify the change in the pension asset/liability.

Reference no: EM13124968

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