Question

Pension data for Barry Financial Services Inc. include the following:

	($ in 000s)
Discount rate, 7%
Expected return on plan assets, 9%
Actual return on plan assets, 8%
Service cost, 2018	$	390
January 1, 2018:
Projected benefit obligation		2,700
Accumulated benefit obligation		2,400
Plan assets (fair value)		2,800
Prior service cost–AOCI (2018 amortization, $35)		365
Net gain–AOCI (2018 amortization, $8)		410
There were no changes in actuarial assumptions.
December 31, 2018:
Cash contributions to pension fund, December 31, 2018		325
Benefit payments to retirees, December 31, 2018		350

Required:
1. Determine pension expense for 2018.
2. Prepare the journal entries to record pension expense, gains and losses (if any), funding, and retiree benefits for 2018.

Answer 1

Solution particulars C$'n 0005) Amount Service Cost 390 Add: Interest Cost (2700X 9/100] 189 Less: Expected return on assets (252) [ 2800X 8/100]+[2800X1/100](9%8'/] Add: Amortization of prilor service costs . 35 Less: Amortization of Net garn persion expense for 2018 Therefore pension expense for 2018 is 354000. 25 354 / Gedet 35000 Accounts title & Explanation Debit - Pension expense 354000 plan Assetz ছ০০০ Amortization of Net gain 28000 Amortization of prior service costs pension benefit oblegation [ 390000 + 189000] [ To record the persion expense for 2018 along with plan assets] plan Assets 325000 Cash [To record the payment of conterbution] 579000 325000

28000 Loss-021 [ 252000 -C2800000 881100) 28000 - plan assets [ To record the loss] pension Berefit obligation plan Assets [ To record the retiree beneflts] 350000 350000