Please answer a, b, c and complete the worksheet. The following information pert

Question

Please answer a, b, c and complete the worksheet.

The following information pertains to the defined benefit pension plan of No Sleep, Inc. for the year ended 12/31/2017 Beginning pension benefit obligation (1/1/17) Beginning pension plan assets (1/1/17) Beginning AOCI- prior service cost Beginning AOCI - gains / losses Annual service cost Settlement rate Expected return on plan assets Actual return on plan assets Amortization of prior service cost Funding contributions Benefits paid to retirees Average service life of all covered employees S285,000 S170,000 S37,000 Gains of $56,000 S22,000 10% S18,000 $11 ,000 S44,000 S23,000 20 years Using this information, complete the pension worksheet on the following page for 2017. You may detach the worksheet from the exam packet if you would like, but you must return it with your exam. This step is required and will be graded. I What amount of pension expense will No Sleep, Inc. report on its 2017 income statement? What will No Sleep, Inc. report on its balance sheet with respect to its pension as of 12/31/17? Please indicate whether No Sleep will report an asset or a liability as well as the amount

Explanation / Answer

b. Pension expenses Seervice Cost $22,000 Interest Cost ($285000 x 10%) $28,500 Actual return on plan assets ($18,000) Amortization of prior service cost $11,000 Pension expenses $43,500 a. Pension Worksheet No Sleep Inc. Pension worksheet - 2017 General Journal Entries Memo Record Items Annual Pension Expense Cash OCI: Prior Service Cost OCI:(Gains)/Losses Pension Asset/(Liability) Projected Benefit Obligation Plan Assets Balance January 1,2017               (115,000)          (285,000)          170,000 (a)Service Cost           22,000             (22,000) (b)Interest Cost           28,500             (28,500) ( c )Expected /actual return         (18,000)            1,000            17,000 (d)Contributions         (44,000)            44,000 (e)Benefit paid to retirees               23,000          (23,000) (f)Amortization of prior period cost           11,000         (11,000) (g)Amortization of gains/losses Journal entry for 2017           43,500         (44,000)         (11,000)            1,000                    10,500 Accumulated OCI, 1/1/2017           37,000        (56,000) Balance, December 31, 2017           26,000        (55,000)               (104,500)          (312,500)          208,000 Expected return are less then actual return, thus there is gain in OCI c. No Sleep will report Pension Liability in its balance sheet of 2017 Pension Liability    $104500

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