Q1: Howard Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2011, 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

OCI Loss 65,000

As a result of the operation of the plan during 2011, the actuary provided the following additional data at December 31, 2011.

Service cost for 2011 $ 75,000

Actual return on plan assets in 2011 45,000

Amortization of prior service cost 20,000

Contributions in 2011 115,000

Benefits paid retirees in 2011 70,000

Settlement rate 7%

Expected return rate 8%

Average remaining service life of active employees 10 years

Instructions

(a) Compute pension expense for Howard Corp. for the year 2011 by preparing a pension worksheet (check: pension expense = 101,500).

(b) Prepare the journal entry for pension expense.