Measuring and recording pension expense

Assignment Help Accounting Basics

Reference no: EM13131273

Kessler, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2011:

January 1, 2011 December 31, 2011
Projected benefit obligation $2,500,000 $2,850,000
Market-related asset value 1,250,000 1,600,000
Accumulated benefit obligation 1,930,000 2,620,000
Accumulated OCI - (PSC) 540,000 300,000

The service cost component for 2011 is $150,000 and the amortization of prior service cost is $240,000. The company's actual funding of the plan in 2011 amounted to $510,000. The expected return on plan assets and the settlement rate were both 8%.

Instructions

(a) Determine the pension expense to be reported in 2011.

(b) Prepare the journal entry to record pension expense and the employers' contribution to the pension plan in 2011.

Reference no: EM13131273

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