INTERMEDIATE ACCOUNTING: PENSIONS
Technique Technologies, Inc. started a? defined-benefit plan this year. As part of the union? agreement, it provided $560,000 in retroactive benefits to all employees for their prior? years' service. The company amortized $15,600 of these benefits during the current year. At the end of the? year, the actuary provided you with the following information related to the? plan:
Service cost for the? year $915,590.
Actual return? (loss) on plan? assets $128,000?).
Contributions for the? year $345,700.
Expected return on plan? assets, loss of $150,000.
Settlement? rate of 10?%.
No retirement benefits were paid during the year.
REQUIREMENTS:
a) Compute the pension cost for the year. (List components of pension cost and their costs, with a final sum)
b) Determine the ending balances of the plan assets and the projected benefit obligation, and indicate the funded status of the plan.
c) Prepare the journal entry to record the current year's pension cost.
d) Reconcile the ending balance in accumulated other comprehensive income.