Pearl 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 $56,100.2. The company’s funding policy requires a contribution to the pension trustee amounting to $136,572 for 2020.3. As of January 1, 2020, the company had a projected benefit obligation of $903,400, an accumulated benefit obligation of $799,600, and a debit balance of $401,800 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $602,500 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were paid.4. Amortization of prior service cost was $49,700 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. (Enteramounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)Components of Pension Expense%24%24>>>>>

The pension expense consists of four main components such as current service cost, past service…

Answered: Pearl Company sponsors a defined…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Pearl 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 $56,100.
2.		The company’s funding policy requires a contribution to the pension trustee amounting to $136,572 for 2020.
3.		As of January 1, 2020, the company had a projected benefit obligation of $903,400, an accumulated benefit obligation of $799,600, and a debit balance of $401,800 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $602,500 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were paid.
4.		Amortization of prior service cost was $49,700 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
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