Markland Corporation sponsors a defined benefit pension plan for its employees. On January 1, 2018, the following balances relate to this plan.

Plan assets $500,000

Defined benefit obligation 800,000

Pension asset/liability 300,000

As a result of the operation of the plan during 2018, the following additional data were provided by the actuary.

Service cost for 2018 $150,000

Discount (interest) rate 8%

Actual return on plan assets in 2018 60,000

Unexpected loss from change in defined benefit obligation,

due to change in actuarial predictions 85,000

Contributions in 2018 120,000

Benefits paid to retirees in 2018 90,000

Instructions

(a) Using the data above, use a computer spreadsheet to prepare a pension worksheet. On the pension worksheet, compute pension expense, pension asset/liability, defined benefit obligation, plan assets, and other comprehensive income. (10 marks)

(b) Prepare the journal entry for pension expense for 2018. (2 marks)