Muskoka Canoes has had a defined benefit pension plan for three decades. Two years ago, the company
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Muskoka Canoes has had a defined benefit pension plan for three decades. Two years ago, the company improved the benefits at a cost of $2,800,000.
Pension plan assets were $84,000,000 while pension obligations were $76,000,000 at the beginning of the year.
For the current year, Muskoka’s pension plan incurred a current service cost of $5,400,000 and interest of $7,600,000. The pension’s assets earned $8,000,000, which is $400,000 below expectations. There were no actuarial gains or losses for the year.
Required:
a. Compute the pension expense for the year.
b. Record the journal entries for Muskoka’s pension plan.
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