Question
(7 points) M Service Co. reported the following for its defined-benefit pension plan for 2019: Settlement rate 4.00% Expected rate of return on plan assets
- (7 points) M Service Co. reported the following for its defined-benefit pension plan for 2019:
Settlement rate 4.00%
Expected rate of return on plan assets 6.25%
Service cost $225,000
Actual return on plan assets $280,000
Benefits paid to retirees $150,000
Average remaining service life of existing employees 10 years
Projected benefit obligation as of 12-31-18 $5,100,000
Fair value of plan assets as of 12-31-18 $4,300,000
Other comprehensive income Prior Service Cost as of 12-31-18 $33,000 dr
Other comprehensive income Gains/Loss as of 12-31-18 $212,700 dr
M amortizes its prior service cost on a straight-line basis over the average remaining service life of its existing employees.
- Using the above information for M, prepare a pension work sheet for 2019.
- Using the work sheet, prepare the journal entry to reflect the accounting for the company's pension plan for the year ending December 31, 2019.
- Will M need to record corridor amortization for 2020, yes or no? Support your answer with calculations.
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