Reference no: EM132065301
Pension Problem - Below is selected 2015 data about ABC Corporation's defined benefit plan:
Plan assets balance, January 1 $ 950,000
Service cost 210,000
Contributions 2015 92,000
Benefits paid 60,000
PBO balance, January 1 1,200,000
Gain from change in actuarial assumptions 160,000
Actual return on plan assets 50,000
The expected long-term rate of return on plan assets was 11%. There were no AOCI balances related to pensions on January 1, 2015. On January 2, 2015, ABC Corporation amended the pension formula creating a prior service cost of $225,000. The employee base is expected to work, on average, 15 additional years. The actuary advised that the appropriate discount rate was 6%. The company prepares its financial statements according to US GAAP Standards, and has a December 31 fiscal year end.
Please provide your response to the following questions
1. What is 2015 pension expense?
2. Prepare the journal entry to record the following for 2015:
a. pension expense
b. gains or losses
c. prior service cost
d. funding
e. payment of retiree benefits.
3. What will ABC report as a net pension asset or liability in its 2015 balance sheet?