Question - Kessler, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2015:
January 1, 2015 December 31, 2015
Projected benefit obligation $2,500,000 $2,590,000
Fair value of plan assets 1,250,000 1,600,000
Accumulated OCI - (PSC) 540,000 300,000
The service cost component for 2015 is $140,000 and the amortization of prior service cost is $240,000. The company's actual funding of the plan in 2015 amounted to $500,000. The expected return on plan assets and the settlement rate were both 8%. Benefits Paid during 2015 from the plan were $250,000.
Instructions
(a) Prepare a pension worksheet for 2015 and determine the pension expense to be reported in 2015.
(b) Prepare the journal entry to record pension expense and the employers' contribution to the pension plan in 2015.