Helv Industries sponsors a defined-benefit pension plan for its employees. As of January 1, 2020, the pension plan reported a Projected Benefit Obligation of $1,334,000 and fair value of Plan Assets of $996,000.
- Helv Industries sponsors a defined-benefit pension plan for its employees. As of January 1, 2020, the pension plan reported a Projected Benefit Obligation of $1,334,000 and fair value of Plan Assets of $996,000.
Helv also reports the following as of January 1, 2020:
|
Dr (Cr) |
||
|
Net pension asset/liability |
$ (338,000) |
|
|
Accumulated other comprehensive income (AOCI) |
|
|
|
Prior service cost |
$ 100,000 |
|
|
Gains/Losses |
$ - |
|
Additionally, the following information is available for 2020:
|
Service cost |
$ 306,000 |
|
Actual return of plan assets |
$ 55,000 |
|
Amortization of prior service costs |
$ 5,000 |
|
Benefits paid to retirees |
$ 420,000 |
|
Contributions to the plan |
$ 285,000 |
|
Discount rate |
10.0% |
|
Expected return rate |
7.5% |
Instructions
- Determine pension expense for 2020.
- Prepare the 2020
journal entry to reflect pension activity for Helv Industries.
- What is the Net Pension Asset/Liability at the end of 2020?
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