Novak Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800. 2. The company's funding policy requires a contribution to the pension trustee amounting to $137,228 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $899,100, an accumulated benefit obligation of $797,300, and a debit balance of $398,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $597,300 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense
Novak Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800. 2. The company's funding policy requires a contribution to the pension trustee amounting to $137,228 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $899,100, an accumulated benefit obligation of $797,300, and a debit balance of $398,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $597,300 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![**Exercise 20-11: Novak Company Pension Plan Analysis**
Novak Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020, during which no benefits were paid:
1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800.
2. The company’s funding policy requires a contribution to the pension trustee amounting to $137,228 for 2020.
3. As of January 1, 2020, the company had a projected benefit obligation of $899,100, an accumulated benefit obligation of $797,300, and a debit balance of $398,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $597,300 at the beginning of the year. The actual and expected return on plan assets was $54,000.
4. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were paid.
5. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020.
**Task:** Determine the amounts of the components of pension expense that should be recognized by the company in 2020.
_(Enter amounts that reduce pension expense with either a negative sign preceding the number e.g., -45 or parentheses e.g. (45).)_
**Components of Pension Expense:**
- [Component 1] $[Amount]
- [Component 2] $[Amount]
- [Component 3] $[Amount]
- [Component 4] $[Amount]
**Note:** For calculations or additional references, links to account lists and related text sections may be provided for detailed information.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F11ff6cc1-fecc-482c-bb9f-f297ceae40f2%2Fb0b25ba4-8024-43e4-bc39-09bc9d28882f%2Fpluy5uf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Exercise 20-11: Novak Company Pension Plan Analysis**
Novak Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020, during which no benefits were paid:
1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800.
2. The company’s funding policy requires a contribution to the pension trustee amounting to $137,228 for 2020.
3. As of January 1, 2020, the company had a projected benefit obligation of $899,100, an accumulated benefit obligation of $797,300, and a debit balance of $398,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $597,300 at the beginning of the year. The actual and expected return on plan assets was $54,000.
4. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were paid.
5. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020.
**Task:** Determine the amounts of the components of pension expense that should be recognized by the company in 2020.
_(Enter amounts that reduce pension expense with either a negative sign preceding the number e.g., -45 or parentheses e.g. (45).)_
**Components of Pension Expense:**
- [Component 1] $[Amount]
- [Component 2] $[Amount]
- [Component 3] $[Amount]
- [Component 4] $[Amount]
**Note:** For calculations or additional references, links to account lists and related text sections may be provided for detailed information.
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