Question

The following information is available for the pension plan of Crane Company for the year 2017. Actual and expected return on plan assets $ 15,300 Benefits paid to retirees 41,500 Contributions (funding) 88,100 Interest/discount rate 10 % Prior service cost amortization 7,700 Projected benefit obligation, January 1, 2017 496,000 Service cost 54,500

Compute pension expense for the year 2017. Pension expense for 2017 $ SHOW LIST OF ACCOUNTS

Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

Answer 1

Amount $ 54,500 Computation of pension expense :- Particulars Service cost Interest cost (Projected benefit obligation, January 1, 2017*Interest/discount rate) Actual (expected) return on plan assets Unrecognized prior service cost amortization Pension expense for 2012 49,600 (15,300) 7,700 96,500 Entry for record of Pension expense and the employer's contribution to the pension plan in 2017 :- Date Accounts Title & Explanation Debit $ Credit $ Pension expense 96,500 To Cash 88,100 To Pension Assets/Liability 700 To Other comprehensive income (PSC) 7,700 (Entry for pension expense and employers contribtion to pension plan)