Larson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan. Plan assets (market-related value) $270,000 Projected benefit obligation 340,000 Pension asset/liability 70,000 Cr. Prior service cost 90,000 OCI—Loss 39,000 As a result of the operation of the plan during 2021, the actuary provided the following additional data for 2021. Service cost $45,000 Actual return on plan assets 27,000 Amortization of prior service cost 12,000 Contributions 65,000 Benefits paid retirees 41,000 Settlement rate 7% Expected return on plan assets 8% Average remaining service life of active employees 10 years Instructions Compute pension expense for Larson Corp. for the year 2021 by preparing a pension worksheet that shows the journal entry for pension expense. Indicate the pension amounts reported in the financial statements.
Larson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan. Plan assets (market-related value) $270,000 Projected benefit obligation 340,000 Pension asset/liability 70,000 Cr. Prior service cost 90,000 OCI—Loss 39,000 As a result of the operation of the plan during 2021, the actuary provided the following additional data for 2021. Service cost $45,000 Actual return on plan assets 27,000 Amortization of prior service cost 12,000 Contributions 65,000 Benefits paid retirees 41,000 Settlement rate 7% Expected return on plan assets 8% Average remaining service life of active employees 10 years Instructions Compute pension expense for Larson Corp. for the year 2021 by preparing a pension worksheet that shows the journal entry for pension expense. Indicate the pension amounts reported in the financial statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Larson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan.
| Plan assets (market-related value) | $270,000 | ||
| Projected benefit obligation | 340,000 | ||
| Pension asset/liability | 70,000 | Cr. | |
| Prior service cost | 90,000 | ||
| OCI—Loss | 39,000 |
As a result of the operation of the plan during 2021, the actuary provided the following additional data for 2021.
| Service cost | $45,000 | |
| Actual return on plan assets | 27,000 | |
| Amortization of prior service cost | 12,000 | |
| Contributions | 65,000 | |
| Benefits paid retirees | 41,000 | |
| Settlement rate | 7% | |
| Expected return on plan assets | 8% | |
| Average remaining service life of active employees | 10 years |
Instructions
- Compute pension expense for Larson Corp. for the year 2021 by preparing a pension worksheet that shows the
journal entry for pension expense. - Indicate the pension amounts reported in the financial statements.
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