Question - Kane, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2013:
January 1, 2013
Projected benefit obligation $3,500,000
Fair value of plan assets 2,950,000
Accumulated OCI - (PSC) 450,000
The service cost component for 2013 is $120,000 and the amortization of prior service cost is $150,000. The company's actual funding of the plan in 2013 amounted to $525,000. The actual and expected return on plan assets was 8% and the settlement rate was 6%. The payment of benefits totaled $295,000.
Instructions
(a) Prepare a pension worksheet (in excel)
(b) Determine the pension expense to be reported in 2013.
(c) Prepare the journal entry to record pension expense and the employers' contribution to the pension plan in 2013.