On January 1, 2016, Smith Company adopted a defined benefit pension plan. At that time, Smith awarded retroactive benefits to its employees, resulting in a prior service cost that created a projected benefit obligation of $1,250,000 on that date (which it did not fund). Smith decided to amortize the prior service cost by the straight-line method over the 20-year average remaining service life of its active participating employees. Smiths actuary has also provided the following additional information for 2016 and 2017: (1) service cost: 2016, $147,000; 2017, $153,000; (2) expected (and actual) return on plan assets: 2017, $33,000; and (3) projected benefit obligation: 1/1/2017, $1,522,000. The discount rate was 10% in both 2016 and 2017. Smith contributed $330,000 and $350,000 to the pension fund at the end of 2016 and 2017, respectively. There are no other components of Smiths pension expense.

Required:

1. Compute the amount of Smiths pension expense for 2016 and 2017.

2. Prepare all the journal entries related to Smiths pension plan for 2016 and 2017.

3. If the prior service cost was vested, explain how Smiths pension expense for 2016 would be different under amended IAS 19.

Instructions S 2 on January 1, 2016. Smith Company opted a deed en pension plan in 51.250.000 de dictu m decided to another service participang employees Simm's actuary has proces te gaa n toe 2016 assets 2017, 533,000, and projected bene ngation 16.2017 51.522.000 The discount rate end of 2016 and 2017 respectively There are no other components of Smith's pension expense service cost by *** 19 10 1923 US 22 53 1. Compute the amount of Suspension expense for 2016 and 2017 2. Prepare a me n tered to Sospension 3 me por service cost explain how PAGE 2016 PAGE 2017 GENERAL JOURNAL Score: 125/155 POST. REF. CREDIT DATE ACCOUNT TITLE Jan. 1 Other Comprehensive Income: Prior Service Cost Accrued/Prepaid Pension Cost DEBIT 1,250,000.00 1,250,000.00 Dec 31 Pension Expense 334,500.00 Accrued/Prepaid Pension Cost 4,500.00 330,000.00 Cash PAGE 2016 PAGE 2017 GENERAL JOURNAL Score: 125/155 DATE ACCOUNT TITLE POST REF CREDIT DEBIT 1,522,000.00 Dec 31 Other Comprehensive Income: Prior Service Cost Accrued/Prepaid Pension Cost Dec. 31" Pension Expense 1,522,000.00 1,751,000.00 Cash 350,000.00 Accrued/Prepaid Pension Cost 1,401,100.00 Compute the amount of Smith's pension expense for 2016 and 2017 2016 2017 Pension expense