Simple Pension Work Sheet Refer to Practice 17-8. Enter all of the pension information, including…

 
   

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Simple Pension Work Sheet

Refer to Practice 17-8. Enter all of the pension information, including the beginning balances, in a pension work sheet. Use the pension work sheet to display the computation of pension expense for the year as well as the ending balances for all pension-related items.

Practice 17-8

Simple Computation of the Net Pension Asset or Liability

On January 1 of Year 1, the company had a projected benefit obligation (PBO) of $10,000 and a pension fund with a fair value of $9,200. There was no unrecognized prior service cost, nor were there deferred pension gains or losses. The following information relates to the pension plan during the yea

Service cost                                                                    

$1,200

Actual return on the pension fund                                                   

$250

Benefits paid to retirees                                                          

$100

Contribution to the pension fund                                                   

$1,050

Discount rate for PBO                                                           

9%

Expected return on pension fund                                                     

10%

Compute (1) the pension-related amount that should be reported on the company’s balance sheet on January 1 of Year 1, (2) the PBO as of December 31, and (3) the fair value of the pension fund as of December 31.