Reference no: EM133078936

Question - Larkspur Company sponsors a defined benefit plan for its 100 employees. On January 1, 2020, the company's actuary provided the following information.

Accumulated other comprehensive loss (PSC) $151,900

Pension plan assets (fair value and market-related asset value) 198,500

Accumulated benefit obligation 256,900

Projected benefit obligation 379,200

The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2020, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $47,200; the projected benefit obligation was $499,500; fair value of pension assets was $271,500; the accumulated benefit obligation amounted to $362,700. The expected return on plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is $10,000. The company's current year's contribution to the pension plan amounted to $63,000. No benefits were paid during the year.

Determine the components of pension expense that the company would recognize in 2020.

Components of Pension Expense

Service Cost $47200

Interest on Projected Benefit Obligation $37920

Actual Return on Plan Assets $-10000

Unexpected Loss $?

Amortization of Gain or Loss $0

Amortization of Prior Service Cost $15190

Pension expense $?

Required -

1. Prepare the journal entry to record the pension expense and the company's funding of the pension plan in 2020.

2. Compute the amount of the 2020 increase/decrease in gains or losses and the amount to be amortized in 2020 and 2021.

3. Indicate the pension amounts reported in the financial statement as of December 31, 2020.