PEN$-6$

Maines Company

Maines Company provides the following information about its defined benefit pension plan for the year $2006$:

Service Cost $90,000$

Plan Contributions $105,000$

Prior Service Cost $($PSC$)$ Amortization $10,000$

Benefits Paid $40,000$

Plan Assets on Jan. $1,2006640,000$

PBO on Jan. $1,2006800,000$

Unrecognized PSC on Jan. $1,2006150,000$

Actual and Expected Return on Plan Assets $10\%$

Discount Rate $9\%$

The tax rate for Maines Company is $35\%.$

Required:

$1.$ Using the above information, compute Maines Company$$s $2006$ pension expense.

$2.$ Prepare a pension worksheet detailing Maines Company$$s $2006$ pension plan activity.

$3.$ Write the $2006$ journal entry Maines Company will make to record its $2006$ pension activity.

$4.$ What pension$-$related balances will appear on Maines Company$$s $2006$ balance sheet?