Question

Exercise 20-10

Ivanhoe Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan.

Plan assets		$469,100
Projected benefit obligation		575,200
Pension asset/liability		106,100
Accumulated OCI (PSC)		97,900	Dr.

As a result of the operation of the plan during 2017, the following additional data are provided by the actuary.

Service cost		$90,500
Settlement rate, 8%
Actual return on plan assets		56,400
Amortization of prior service cost		18,800
Expected return on plan assets		53,400
Unexpected loss from change in projected benefit obligation,    due to change in actuarial predictions		75,600
Contributions		98,500
Benefits paid retirees		89,100

Using the data above, compute pension expense for Ivanhoe Corp. for the year 2017 by preparing a pension worksheet. (Enter all amounts as positive.)

Prepare the journal entry for pension expense for 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.)

Answer 1

Particulars	Amount
Service cost	$90, 500
Interest cost (575200*8%)	46016
Actual(expected) return on plan assets	(56400)
Pension expense	$90,500

Account Titles	Debit	Credit
Pension expense	$90500
Cash		$98500
Pension Assets	$8000