Service cost
Interest Cost
ROPA:
Amortization for Prior Service Cost:
Amortization for G/L
Pension Liability
and finally all the corresponding Journal Entries
Glynis Beach Co. has a defined benefit pension plan for its employees. At January 1, 2010 the ABO is $560,000 and the PBO is $600,000. Service cost
for 2010 is estimated to be $480,000 and the expected return on plan assets and the settlement rate are 9% and 10% respectively.
Glynis Beach Co uses the years-of-service method of amortization for PSC, which is $280,000 at January 1, 2010. The total number of service years is 1,000 and
the service years attributable to 2010 is 200 (average service life of 5 years).
At January 1, 2010, the fair market value of the plan assets is 568,000 with an accumulated OCI (loss) of $180,000 at the same date. Any amortization of the unrecognized loss
is recognized straight-line over the average remaining service life of employees. Glynis Beach Co. plans to contribute $462,000 to the pan fund in 2010.