Howard Corp. sponsors a defined-benefit pension plan for its employees. On Janua

Question

Howard Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2015, the following balances related to this plan. Plan assets (fair value) $540,000 Projected benefit obligation 590,000 Pension asset/liability 50,000 Cr. Prior service cost 74,000 OCI - Loss 64,000 As a result of the operation of the plan during 2015, the actuary provided the following additional data at December 31, 2015. Service cost for 2015 $69,000 Actual return on plan assets in 2015 38,780 Amortization of prior service cost 14,200 Contributions in 2015 114,000 Benefits paid retirees in 2015 79,000 Settlement rate 6 % Expected return rate 7 % Average remaining service life of active employees 10 years

Prepare the journal entry for pension expense Compute pension expense for Howard Corp. for the year 2015 by preparing a pension worksheet

Explanation / Answer

First of all a very nice as well as intersting question from your side.

So now straight to the question, as asked above with all the information available from your side and from mine, the answer is as under:

After calculation of the above given information, we can conclude that the answer will be like this:

Debit Credit

Debit Pension expense 50,000

Credit Cash(or Pension Payable) 50,000

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