(Pension Expense, Journal Entries) Walker Company provides the following selected information related to its defined benefit pension plan for 2010.

Instructions

(a) Compute pension expense and prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2010.

(b) Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2010.

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Pension asset/liability (January 1) Accumulated benefit obligation (December 31) Actual and expected return on plan assets Contributions (funding) in 2010 Fair value of plan assets (December 31) Settlement rate $ 25,000 Cr. 400,000 15,000 150,000 800,000 10% Projected benefit obligation (January 1) Service cost 700,000 90,000