Crystal Glass Works, Ltd. provided you with the following information regarding its defined-benefit pension plan.
a. Beginning plan assets at fair value (market-related value), $ 600,000
b. Beginning projected benefit obligation (PBO), $ 558,000
c. Service cost for the year, $ 125,800
d. Settlement rate, 12%
e. Expected return on plan assets, 9%
f. Actual return on plan assets, $ 30,100 loss
g. Contributions for the year, $ 45,700
h. Benefit payments for the year, $ 97,440
i. Beginning Accumulated Other Comprehensive Income, $ 42,000 (due to unamortized net actuarial gains)
j. Prior service costs awarded during the year (not effective as of the beginning of the year) for vested employees, $ 19,690
k. Amortization of prior service costs, $ 7,000
l. Decrease in the ending projected benefit obligation due to changes in actuarial assumptions (i.e., actuarial gain), $ 8,000
m. Average remaining service life of the employee base, 15 years
Required
a. Prepare the separate “conceptual” journal entries for the relevant information above.
b. Compute the pension cost for the year.
c. Determine the ending balances of the plan assets and the projected benefit obligation and indicate the funded status of the plan.
d. Prepare the journal entry to record the current year’s pension cost.