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999 Nunez Corp. sponsors a defined benefit pension plan for its employees. Information about the plan is provided below. Required: (a) Determine the pension-related journal
999 Nunez Corp. sponsors a defined benefit pension plan for its employees. Information about the plan is provided below. Required: (a) Determine the pension-related journal entries that Nunez should record for 2021 and 2022. (b) Determine the effects of the pension plan on Nunez's reported net income for 2021 and 2022 (ignoring taxes). (c) Determine the balances that Nunez should report on its December 31, 2021 and 2022 balance sheets for Net Pension Asset or Liability and Accumulated OCI-Prior Service Costs. Also indicate the sections of the balance sheet in which each of these items should appear (i.e., Assets, Liabilities, or Equity). (d) Prepare pension worksheets to summarize the pension data for 2021 and 2022. This should help you determine the answers to parts (a), (b), and (c) above. You may use the templates provided later in this document. Nunez uses the years-of-service method for any necessary amortization of prior service costs. The January 1,2022 plan amendment noted above affected all 100 employees that were active at that time. Those 100 employees are expected to provide service in the future as projected below. (I.e., Nunez expects those employees to provide 500 total future service-years and expects the company to "consume" those 500 service-years in the pattern below.)
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