U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2010.
U.S.M.'s actuary determined that 2011 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the end of 2011, and retirees were paid $44,000 from plan assets.
Required:
Determine the following amounts at the end of 2011.
1. Pension expense
2. Projected benefit obligation
3. Plan assets
4. Net pension asset or net pension liability
5. Prepare journal entries to record the pension expense, funding of plan assets, and retiree benefit payments.