Reference no: EM132844209

Sandhill Corporation sponsors a defined benefit pension plan for its 100 employees. On January 1, 2020, the company's actuary provided the following information:

Pension plan assets (fair value) $1,060,000

Defined benefit obligation 1,440,000

• The actuary calculated that the present value of future benefits earned for employee services rendered in 2020 amounted to $213,200, the December 31, 2020 defined benefit obligation was $1,825,200, and the appropriate interest or discount rate was 11%. The plan assets generated a return of $80,600 during 2020. The company funded the 2020 current service cost as well as $106,600 of the past service costs recognized in a previous year; however, no benefits were paid during the year. SandhillCorporation is a private company and applies ASPE.

Problem 1: Issue schedule that indicates what the plan's surplus or deficit is at December 31, 2020.

Problem 2: Determine the pension expense that the company will recognize in 2020.

Problem 3: Prepare the journal entries to record pension expense and the company's funding of the pension plan in 2020.