P19-6 Intermediate Accounting; Gordon

Bruce West Advertising Inc initiated a defined benefit pension plan five years ago. All prior service costs are for vested employees. The beginning balances related to the company's pension plan are presented below.

Description Current Year (000s omitted)

Beginning plan assets at fair value $8,010

Beginning projected benefit obligation $9,133

Service costs 1,827

Settlement Rate 8%

Expected return on plan assets 4%

Actual return on plan assets 570

Contributions for the year 1,060

Benefits paid during the year 900

Amoritization of prior service cost 670

Beginning balance of:

Unamoritized prior service costs 2,020

Unamoritized net actuarial gains 3,012

Average remaining service life of employees 5 years

Required:

A: Compute the pension cost for the year

B: Determine the ending balances of the plan assets and the projected benefit obligation and indicate the funded status of the plan.

C: Reconcile the ending balance in accumulated other comprehensive income and indicate the amounts attributable to unamoritized prior service cost and unamoritized net losses.

D: Prepare the journal entry to record the current years pension cost.