(a) Compute pension expense for Howard Corp. for the year 2020 by preparing a pension worksheet. (b) Prepare the journal entry for pension expense.
Howard Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan.
Plan assets (fair value) $2,200,000
Projected benefit obligation 2,400,000
Pension asset/liability 200,000 Cr.
Prior service cost 300,000
OCI – Loss 260,000
As a result of the operation of the plan during 2020, the actuary provided the following additional data at December 31, 2020.
Service cost for 2020 $280,000
Actual return on plan assets in 2020 180,000
Amortization of prior service cost 60,000
Contributions in 2020 460,000
Benefits paid retirees in 2020 320,000
Settlement rate 7%
Expected return rate 8%
Average remaining service life of active employees 10 years
(a) Compute pension expense for Howard Corp. for the year 2020 by preparing a pension worksheet.
(b) Prepare the
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