Pate Inc. Sponsors a defined benefit pension plan for its employees. On January 1, 2021 the following balances relate to this plan.
Fair Value Plan assets …….. $560,000
Projected benefit obligation …….. 760,000
Unamortized prior service cost …….. 100,000
Unrecognized net loss …….. 86,000
Other data related to the pension plan for 2021
Service cost $80,000
Contributions to the plan (end of the year) 116,000
Benefits paid to retirees (end of the year) 66,000
PBO Loss 10,000
Actual return on plan asset 12%
Expected return on plan asset 9%
Discount (Interest) rate 10%
Average remaining service life of active employees 10 Years
REQUIRED:
1. Calculate the projected benefit obligation at 12/31/2021.
2. Calculate the fair value of the plan assets at 12/31 2021.
3. Calculate the amount of net gain or loss amortization for 2021 and the amount of accumulated unrecognized net gain or loss at 1/1/2022.
4. Calculate the amount of net gain or loss amortization for 2022.
5. Calculate the pension expense for 2021.
6. Prepare all the journal entries related to the above pension plan for 2021
7. Show how the amount related to pension will be reported on 2021 Income Statement and Balance Sheet.
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