Pension Worksheet

Howard Corp. sponsors a defined$-$benefit pension plan for its employees. On January $1,2021,$ the following balances related to this plan.

Plan assets $($market$-$related value$)$ $$450,000$ Projected benefit obligation $600,000$

Pension asset$/$liability $150,000$ Cr$.$

Prior service cost $75,000$ Dr$.$

OCI $$ Gain $65,000$ Cr$.$

As a result of the operation of the plan during $2021,$ the actuary provided the following additional data at December $31,2021.$

Current Service cost for $2021$ $ $75,000$

Settlement rate $7\%$

Actual return on plan assets in $202145,000$

Expected return on plan assets in $202136,000$

Amortization of prior service cost $20,000$

Contributions in $2021115,000$

Benefits paid retirees in $202170,000$

Average remaining service life of active employees $10$ years

Required:

$1.$ Using the corridor method, calculate the amount of gain to be amortized from OCIGain account in $2021.$

$2.$ Complete the pension worksheet provided on the next page for Howard Corp. for the year $2021.$ Clearly distinguish debit and credit entries. $($You may create your own worksheet using Excel or Word.$)$

$3.$ Prepare the journal entry for pension expense in $2021.$