Presented below is information related to the pension plan of Zimmer Inc. for the year 2015.
(1) The service cost related to pension expense is $260,000 using the projected benefits approach
(2) The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $480,000 and $380,000, respectively. The expected return on plan assets and the settlement rate is 10%.
(3) On January 1, 2015, company amended it's pension plan and granted prior service benefit having a present value of $70,000
(4) At the beginning of the period, fair value of pension plan assets, $460,000.
(5) The contribution made to the pension fund in 2015 was $280,000
(6) Prior service cost amortization for 2015 $ 7,000
(7) Actual Return on plan assets $ 50,000
(8) Change in actuarial assumptions establishes a December 31, 2015 Project Benefit Obligation of $872,000
Instructions
(a) Prepare the journal entry(entries) to record pension expense for 2015.
(b) Show how these pension related amounts will be reported in the Income Statement and Balance Sheet of 2015