Selected Information about the pension plan of Roman Co. is as follows: 12/31/14
ID: 2483669 • Letter: S
Question
Selected Information about the pension plan of Roman Co. is as follows:
12/31/14 12/31/15
Accumulated benefit obligation $4,700,000 $4,930,000
Projected benefit obligation 4,950,000 5,150,000
Accumulated OCI (PSC) 1,800,000 1,500,000
Fair value of plan assets 4,750,000 4,950,000
Pension expense 1,000,000 1,700,000
Contribution 985,000 1,350,000
Discount rate (for year) 9% 8%
Instructions
(a) What is the corridor for 2015?
(b) Calculate the pension asset / liability at December 31, 2015.
(c) Prepare the entry for 2015 to record the pension expense and contribution.
Explanation / Answer
a.
.10×4950000=495000; .10×4750000=475000
Corridor is the large=495000
b.
Projected benefit obligation=5150000
Less Fair value of plan assets=4950000
Pension asset/liabilities=200000
c. Debit credit
pension expense 1700000
Cash. 1350000
Other comprehensive income(PSC) 300000
Pension assets/liabilities 50000
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