Rico Corporation initiated a defined benefit pension plan on January 1, 2020. The plan does not provide any retroactive benefits for existing employees. The pension funding payment is made to the trustee on December 31 of each year. The following information is available for 2020 and 2021.

Required

a. In its December 31, 2020, balance sheet, Rico should report what amount of net pension asset/liability?

b. In its December 31, 2021, balance sheet, Rico should report what amount of net pension asset/liability?

c. Prepare the journal entries to record pension expense and plan funding for 2021.

d. Create a worksheet to summarize the pension data at the end of 2021.

Transcribed Image Text:

2020 2021 Service cost Funding payment (contribution) Interest on projected benefit obligation.. Actual and expected return on plan assets $75,000 $82,500 85,000 92,500 7,500 9,000