Question - Husky Company maintains a defined benefit pension with First Hartford Trust. Below are the balances reported by First Hartford on January 1, 2017:
Plan Benefit Obligation $520,000
Plan Assets $650,000
At the beginning of 2017, First Hartford informed Husky that its assumptions for the last five years have been off slightly, and they need to deposit an additional $150,000. Other matters for 2017 are:
The settlement rate is 10%.
The current service cost is $40,000.
Expected earnings are 8%.
Actual earnings are $62,000.
Prior service cost amortization is $25,000.
First Hartford Trust paid retirement benefits of $35,000.
Husky funded the plan $80,000.
Prepare the pension expense entry for 2017.
Determine the balance in the Pension Asset/Liability account stating if it is an asset or a liability.