Reference no: EM132326246

Question :

Mason Company has a noncontributory defined benefit pension plan. On December 31, 2020, information about the pension plan included the following.

Projected Benefit Obligation, Jan. 1, 2020	$ 40,000
Service cost	60,000
Interest cost	3.600
Pension benefits paid	0
Projected Benefit Obligation, Dec. 31, 2020	103,600
Plan Assets. Jan. 1, 2020	50,000
Funding of plan	37,000
Actual return and expected return on plan assets	10,000
Discount rate	9%

Required

a. Prepare a reconciliation of plan assets for 2020.

b. Compute the plan's funded balance on the beginning and ending dates.

c. Provide the 2020 entries for Mason Company to record the defined benefit pension plan.

d. Provide the same entries in (c), assuming cash funding of $55,000 (instead of $37,000).

e. Provide the computation for the $3,600 of interest.