Plan assets $450,000

Projected benefit obligation 600,000

Pension asset/liability (Credit) 150,000

AOCI- Prior service cost (Debit) 75,000

AOCI Gain/Loss (Debit) 65,000

As a result of the operation of the plan during 2022, the actuary provided the following additional data:

Service cost $ 75,000

Actual return on plan assets 45,000

Amortization of prior service cost 20,000

Contributions 115,000

Benefits paid retirees 70,000

Settlement rate 7%

Expected return rate 8%

Average remaining service life of active employees 10 years

Instructions

(A) Using the above information for Howard Corporation, prepare the pension work sheet for 2022. Calculated amounts should be supported.

(Hint: calculate the corridor, to balance the work sheet).

(b) Prepare the journal entry for pension expense.