Preparing and Recording Pension Entries and Preparing Pension Worksheet The following data relate to a pension plan for ISPN Inc. for the year. Account Balances Projected Benefit Obligation Jan. 1 $30,000 Cr. Plan Assets 30,000 Dr. Accumulated OCI-Pension Gain/Loss 5,000 Cr. Accumulated OCI-Prior Service Cost 8,000 Dr. Activity for the Year Service cost $7,000 Contributions 9,000 Prior service cost amortization 1,000 Expected return on plan assets 2,000 Actual return on plan assets 3,000 Required a. Prepare entries to record (1) pension expense, (2) gain or loss deferral (if any), and (3) contributions for the year. Assume a discount rate of 8% and that no benefits were paid to retirees during the year. Include in pension expense, amortization of Accumulated OCI-Pension Gain/Loss using the straight-line method over 15 years. b. Assuming pension expenses are not capitalized as part of inventory or other assets, indicate the effect on the income statement for the year ended December 31. c. Indicate the changes in the following balance sheet accounts between January 1 and December 31: Net pension asset/ liability, Cash, Retained earnings, and Accumulated other comprehensive income. d. Create a worksheet to summarize the pension data at the end of the year. Journal Entries Financial Statement Presentation Pension Worksheet a. Prepare entries to record (1) pension expense, (2) gain or loss deferral (if any), and (3) contributions for the year. Assume a discount rate of 8% and that no benefits were paid to retirees during the year. Include in pension expense, amortization of Accumulated OCI-Pension Gain/Loss using the straight-line method over 15 years. Journal Entries Financial Statement Presentation Pension Worksheet a. Prepare entries to record (1) pension expense, (2) gain or loss deferral (if any), and (3) contributions for the year. Assume a discount rate of 8% and that no benefits were paid to retirees during the year. Include in pension expense, amortization of Accumulated OCI-Pension Gain/Loss using the straight-line method over 15 years. Note: Round your answers to the nearest whole dollar. Date 1. Dec. 31 Account Name Dr. Cr. 0 0 0 0 x 0 0 x 0 0 x To record pension expense 2. Dec. 31 0 0 x 0 0 x To record deferral of unexpected gain on plan assets 3. Dec. 31 0 0 0 0 x To record plan funding Journal Entries Financial Statement Presentation Pension Worksheet b. Assuming pension expenses are not capitalized as part of inventory or other assets, indicate the effect on the income statement for the year ended December 31. Note: Do not use a negative sign with your answers. Note: Round your answers to the nearest whole dollar. Income Statement For the Year Ended December 31 Operating expenses Nonoperating expenses $ $ 0 x 0 c. Indicate the changes in the following balance sheet accounts between January 1 and December 31: Net pension asset/ liability, Cash, Retained earnings, and Accumulated other comprehensive income. Note: Use a negative sign for a net pension liability. Note: Round your answers to the nearest whole dollar. Net change in accounts: Net Pension Asset (Liability) change: $ Cash decrease: Change ($$) 0 x $ 0 x Net change in Equity: Retained earnings decrease (pension expense): $ AOCI increase: Equity net decrease: $ Change ($$) 0 0 x 0