Prepare the journal entry for pension expense

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Reference no: EM131517366

On January 1, 2012, Cisco Company had the following defined benefit pension plan balances.

Defined Benefit Obligation $3,000,000

Fair value of Plan Assets $2,300,000

The interest rate applicable to the plan is 8%. On January 1, 2013, the company amended its pension agreement so that past service costs of $370,000 are created.

The following additional data are provided by the actuary.

2012 2013

Service cost 260,000 380,000

Contributions 320,000 350,000

Benefits 150,000 200,000

Actual return on plan assets 184,000 250,000

Instructions

a) Prepare a pension worksheet for the pension plan for 2012 and 2013.

b) Prepare the journal entry for pension expense for 2013.

Reference no: EM131517366

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