Pension data for the Ben Franklin Company include the following for the current calendar year: Discount rate, 8%Expected return on plan assets, 10%Actual return on plan assets, 9%Service cost, $180,000 January 1: PBO$1,380,000 ABO 980,000 Plan assets 1,480,000 Amortization of prior service cost 18,000 Amortization of net gain 3,800 December 31: Cash contributions to pension fund$218,000 Benefit payments to retirees 238,000 Required:1. Determine pension expense for the year.2. Prepare the journal entries to record pension expense and funding for the year.

Journal: Recording of a business transactions in a chronological order.1 ) Pension expense for the year: Journal entry:

Answered: Pension data for the Ben Franklin…

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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Pension data for the Ben Franklin Company include the following for the current calendar year:

Discount rate, 8%
Expected return on plan assets, 10%
Actual return on plan assets, 9%
Service cost, $180,000


January 1:
PBO	$	1,380,000
ABO		980,000
Plan assets		1,480,000
Amortization of prior service cost		18,000
Amortization of net gain		3,800
December 31:
Cash contributions to pension fund	$	218,000
Benefit payments to retirees		238,000

Required:
1. Determine pension expense for the year.
2. Prepare the journal entries to record pension expense and funding for the year.

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