Problem I

Mangrove Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances related to this plan. Plan assets (market-related value) $360,000 Projected benefit obligation (520,000) Pension asset/liability (160,000). Prior service cost 105,000 Excess Net (gain) or loss in AOCI 71,000 As a result of the operation of the plan during 2017, the actuary provided the following additional data at December 31, 2017. Service cost for 2017 - $94,000 Settlement rate, 6%; expected return rate - 8%; Actual return rate 10% Contributions in 2017 - $80,000 Benefits paid retirees in 2017 - $74,000 Average remaining service life of active employees- 5 years Instructions Using the preceding data, compute pension expense for Mangrove Corp. for the year 2017 by preparing a pension worksheet that shows the journal entry for pension expense. Use the market-related asset value to compute the expected return and for corridor amortization. Show the following: Your pension worksheet Your pension expense entry The computations for any part that requires computation, including Interest cost Expected return on plan assets Amortization of Prior service cost Amortization of Excess gains/losses in AOCI with corridor computation