Question
Shiloh, Inc. has a noncontributory, defined benefit pension plan for its 500 employees. The companys actuary provided the following information: On January 1, 2025 :
Shiloh, Inc. has a noncontributory, defined benefit pension plan for its 500 employees. The companys actuary provided the following information:
On January 1, 2025:
Accumulated other comprehensive income (loss) (PSC): $ 210
Pension plan assets (fair value and market-related asset value): 600
Projected benefit obligation 860
Pension asset/liability 260
The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan.
On December 31, 2025, the actuary calculated that
Pension plan assets (fair value and market-related asset value): $ 740
Projected benefit obligation 996
Service costs for 2025 100
The expected return on plan assets and the settlement rate were both 10%.
The companys current years contribution to the pension plan amounted to $80.
Benefits paid during the year were $50.
a) Compute the actual return on plan assets.
b)Determine the components of pension expense that the company would recognized in 2025. (You may need to complete part (c) first.)
c)Compute the amount of the 2025 increase/decrease in gains or losses.
d)Prepare the journal entry to record the pension expense and the companys funding of the pension plan in 2025.
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