Question

Waterway Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017 in which no benefits were paid.

1.		The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $55,400.
2.		The company’s funding policy requires a contribution to the pension trustee amounting to $134,684 for 2017.
3.		As of January 1, 2017, the company had a projected benefit obligation of $899,800, an accumulated benefit obligation of $793,400, and a debit balance of $403,800 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $600,600 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 8%. No gains or losses occurred in 2017 and no benefits were paid.
4.		Amortization of prior service cost was $50,300 in 2017. Amortization of net gain or loss was not required in 2017. Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Waterway Company for the year 2017. Waterway Company Income Statement (Partial) December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017 DividendsExpensesNet Income / (Loss)Retained Earnings – January 1, 2017Retained Earnings – December 31, 2017RevenuesTotal ExpensesTotal Revenues Amortization of PSCInterest ExpensePension ExpenseRent ExpenseService Cost $ Waterway Company Comprehensive Income Statement December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017 DividendsExpensesNet Income / (Loss)Retained Earnings – January 1, 2017Retained Earnings – December 31, 2017RevenuesTotal ExpensesTotal Revenues $XXXX Amortization of PSCComprehensive IncomeInterest ExpensePension ExpenseRent ExpenseService CostOther Comprehensive Income Amortization of PSCComprehensive IncomeInterest ExpensePension ExpenseRent ExpenseService CostOther Comprehensive Income Amortization of PSCComprehensive IncomeInterest ExpensePension ExpenseRent ExpenseService CostOther Comprehensive Income $XXXX Waterway Company Balance Sheet (Partial) December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017 Current AssetsIntangible AssetsLong-term InvestmentsLiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Intangible AssetsTotal Long-term InvestmentsTotal Property, Plant and EquipmentTotal Stockholders' Equity     Accounts Payable    Accounts Receivable    Accumulated Depreciation    Accumulated Other Comprehensive Income (PSC)    Accumulated Other Comprehensive Loss (PSC)    Common Stock    Pension Liability    Retained Earnings     $ Current AssetsIntangible AssetsLong-term InvestmentsLiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Intangible AssetsTotal Long-term InvestmentsTotal Property, Plant and EquipmentTotal Stockholders' Equity     Accounts Payable    Accounts Receivable    Accumulated Depreciation    Accumulated Other Comprehensive Income (PSC)    Accumulated Other Comprehensive Loss (PSC)    Common Stock    Pension Liability    Retained Earnings     $

Answer 1

Waterway Company Income Statement (Partial) For the Year Ended December 31, 2017
Expenses
Pension Expense	$123284

Waterway Company Comprehensive Income Statement For the Year Ended December 31, 2017
Net Income / (Loss)	$XXXX
Other Comprehensive Income
Amortization of PSC	50300
Comprehensive Income	$XXXX

Waterway Company Balance Sheet (Partial) December 31, 2017
Long-term Liabilities
Pension Liability	$237500
Stockholders' Equity
Accumulated Other Comprehensive Income (PSC)	$353500

Components of Pension Expense
Service cost	55400
Interest on project benefit obligation (899800*8%)	71984
Expected return on plan assets	(54400)
Amortization of prior service cost	50300
Pension expense	123284

403800-50300 = $353500

Partial worksheet	Plan Assets	Projected Benefit Obligation
Bal. January 1, 2017	600600	899800
Service cost		55400
Interest on PBO		71984
Actual return	54400
Contribution	134684
Bal. December 31, 2017	789684	1027184

Pension liability = 1027184-789684 = 237500