Reference no: EM132213193

Question: The pension plan for General GAP, U.S. company, ended Year 6 with a fair value of plan assets and projected benefit obligation of $930,000 and $850,000, respectively. The following information pertains to Year 7 for the plan:

Plan contributions: $110,000

Plan benefits paid: $95,000

Service cost: $275,000

Other Comprehensive Income Balances:

1- Unrecognized prior serivice cost goes from $225,000 at the end of Year 6 to $210,000 at the end of Year 7

2- Current prior service cost: $10,000

3- Unrecognized pension gain goes from $85,000 at the end of Year 6 to $90,000 at the end of Year 7

4- Current pension gain: $12,000

Discount Rate: 8%

Expected (and Actual) Return on Plan Assets: 9%

Tax Rate: 30%

5- Provide the journal entries (including deferred tax impacts) for each of the following events as of the end of Year 7:

a- Contribution to the pension plan

b- Current Year Net Gain

c- Current Year Prior Service Cost

d- Service Cost

e- Interest Cost

f- Return on Plan Assets

g- Amortization of Prior Service Cost

h- Amortization of Net Gain