IWILLNEVERRETIRE, Inc. received the following information from its pension plan trustee concerning the operation of the company’s defined benefit…
IWILLNEVERRETIRE, Inc. received the following information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2003:
Projected benefit obligation (as of 1-1-03) 2,200,000
Plan Value (As of 1-1-03) 1,100,000
Plan Value (As of 1-1-04) 1,300,000
Unrecognized actuarial losses (As of 1-1-03) 300,000
Unamortized Prior Service Cost (As of 1-1-03) 200,000
The expected return on plan assets 9%
The settlement rate 9%
Service Cost for 2003 120,000
Benefits Paid in 2003 200,000
Actuarial losses and prior service cost are both amortized over 6.5 years for 2003. The company’s actual funding of the plan in 2003 amounted to $350,000.
a) Prepare a schedule detailing the components of pension expense to bereported in 2003. (Worksheet ok, but not required).
b) Prepare the journal entries to record pension expense, changes to OCI andthe employers’ contribution for 2003.
c) Extra Credit – Complete a worksheet as outlined in the text