The 20X5 records of Jax Company provided the following data related to its non-contributory, defined benefit pension plan (in \(\$\) thousands):

Required:
1. Compute \(20 \times 5\) pension expense.
2. Give the \(20 X 5\) entry(ies) for Jax Company to record pension expense and funding.
3. Past service cost is being amortized over six years. What term is this? If this were a private company, what term would be used?
4. Prepare the required note disclosure of the amounts of pension fund assets and defined benefit obligations. This schedule should include unrecognized amounts and sum to the recorded pension liability. Is the pension fund overfunded or underfunded from an accounting perspective?

Transcribed Image Text:

a. Defined benefit obligation (report of actuary) Balance, 1 January 20X5 Current service cost Interest cost Pension benefits paid, 20X5 Balance, 31 December 20X5 b. Plan assets at fair value (report of trustee) Balance, 1 January 20X5 Actual return on plan assets Contributions, 20X5 Pension benefits paid, 20X5 Balance, 31 December 20X5 $23,000 1,200 1,840 (400) $25,640 $ 2,408 190 3,214 (400) $ 5,412 Expected long-term rate of return on plan assets, 7% c. 1 January 20X5, balance of unamortized past service cost, $10,000. Amortization period remaining, 6 years. d. There are no unamortized experience gains or losses at 1 January 20X5.