Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020. January 1, 2020 December 31, 2020 Projected benefit obligation $1,517,000 $1,545,000 Market-related and fair value of plan assets 784,000 1,107,400 Accumulated benefit obligation 1,568,000 1,689,300 Accumulated OCI (G/L)—Net gain 0 (201,700 ) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $121,300. The company’s actual funding (contributions) of the plan in 2020 amounted to $245,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,213,000 on January 1, 2020. Assume no benefits paid in 2020. (a) 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 $
Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020. January 1, 2020 December 31, 2020 Projected benefit obligation $1,517,000 $1,545,000 Market-related and fair value of plan assets 784,000 1,107,400 Accumulated benefit obligation 1,568,000 1,689,300 Accumulated OCI (G/L)—Net gain 0 (201,700 ) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $121,300. The company’s actual funding (contributions) of the plan in 2020 amounted to $245,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,213,000 on January 1, 2020. Assume no benefits paid in 2020. (a) 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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Question
7.
Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020.
The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $121,300. The company’s actual funding (contributions) of the plan in 2020 amounted to $245,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,213,000 on January 1, 2020. Assume no benefits paid in 2020.
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January 1, 2020
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December 31, 2020
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| Projected benefit obligation | $1,517,000 | $1,545,000 | |||
| Market-related and fair value of plan assets | 784,000 | 1,107,400 | |||
| Accumulated benefit obligation | 1,568,000 | 1,689,300 | |||
| Accumulated OCI (G/L)—Net gain | 0 | (201,700 | ) |
The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $121,300. The company’s actual funding (contributions) of the plan in 2020 amounted to $245,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,213,000 on January 1, 2020. Assume no benefits paid in 2020.
(a)
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).)
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Components of Pension Expense
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