Latoya Company provides the following selected information related to its define

Question

Latoya Company provides the following selected information related to its defined benefit pension plan for 2014. Pension asset/liability (January 1) $27,320 Cr. Accumulated benefit obligation (December 31) 404,230 Actual and expected return on plan assets 17,540 Contributions (funding) in 2014 150,850 Fair value of plan assets (December 31) 806,240 Settlement rate 10 % Projected benefit obligation (January 1) 734,580 Service cost 80,624

(a) Compute pension expense.

Pension expense for 2014

Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2014. Preparation of a pension worksheet is not required. Benefits paid in 2014 were $69,410.

Explanation / Answer

Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2014.

Computation of pension expense: Service cost 80624 Interest cost ($734580 x 10%) 73458 Expected return on plan assets -17540 Pension expense for 2014 136542

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