Problem 14-2 Determining expense and balance sheet amounts (journal entries) (LO 14-3, LO 14-4, LO 14-6)

Turner Inc. provides a defined benefit pension plan to its employees. The company has 150 employees. The remaining amortization period at December 31, 2016, for prior service cost is 5 years. The average remaining service life of employees is 11 years at January 1, 2017, and 10 years at December 31, 2017. The AOCInet actuarial (gain) loss was zero at December 31, 2016. Turner smooths recognition of its gains and losses when computing its market-related value to compute expected return.

Additional Information:

	December 31,
Description	2017			2016
PBO	$	1,450,000		$	1,377,000
ABO		1,425,000			1,350,000
Fair value of plan assets		1,395,000			1,085,000
Market-related value of plan assets (smoothed recognition)		1,369,000			1,085,000
AOCIprior service cost		?			292,000
Balance sheet pension asset (liability)		?			(292,000	)
Service cost		117,400
Contribution		169,000
PBO actuarial gain		113,250
Benefit payments made		None			None
Discount rate		5	%		5	%
Expected rate of return		7	%		7	%

Required:

5. Prepare the companys required pension journal entries for 2017. (Note: The Five journal entries to prepare are: Prepare the entry to record the first three components of pension expense, Prepare the entry to record the amortization of prior service cost, Prepare the entry to record the contribution to the pension fund, Prepare the entry to record the unexpected gain or loss on plan assets, Prepare the entry to record the actuarial gain or loss on PBO.)

6. Compute the 2017 increase/decrease in AOCInet actuarial (gain) loss and the amount to be amortized in 2017 and 2018.

7. Confirm that the pension asset (liability) on the balance sheet equals the funded status as of December 31, 2017.