Problem
Kingbird Toothpaste Company initiates a defined benefit pension plan for its 50 employees on January 1, 2017. The insurance company which administers the pension plan provided the following selected information for the years 2017, 2018, and 2019.
|
Plan Assets (Fair Value
|
$51000
|
$87300
|
$183130
|
|
Accumulated benefit obligation
|
45100
|
163400
|
290800
|
|
Projected benefit obligation
|
61000
|
203910
|
323900
|
|
Net (gain) loss (for purposes of corridor calculation
|
0
|
78700
|
81518
|
|
Employer's funding contribution (made at end of year)
|
51000
|
61000
|
105800
|
There were no balances as of January 1, 2017, when the plan was initiated. The actual and expected return on plan assets was 10% over the 3-year period, but the settlement rate used to discount the company's pension obligation was 13% in 2017, 11% in 2018, and 8% in 2019. The service cost component of net periodic pension expense amounted to the following: 2017, $61,000; 2018, $87,300; and 2019, $114,700. The average remaining service life per employee is 12 years. No benefits were paid in 2017, $29,800 of benefits were paid in 2018, and $18,700 of benefits were paid in 2019 (all benefits paid at end of year).
Calculate the amount of net periodic pension expense that the company would recognize in 2017, 2018, and 2019.
Pension Expense for 2017?
Pension Expense for 2018?
Pension Expense for 2019?
Prepare the journal entries to record net periodic pension expense, employer's funding contribution, and related pension amounts for the years 2017, 2018, and 2019.