The One About Pensions

Pension data for the Gator Company include the following for the current calendar year:

Discount rate, 8%

Expected return on plan assets, 10%

Actual return on plan assets, 9%

Service cost, $200,000

January 1:

PBO	$1,400,000
ABO	1,000,000
Plan assets	1,500,000
Amortization of prior service cost	20,000
Amortization of net gain	4,000
December 31:
Cash contributions to pension fund	$220,000
Benefit payments to retirees	240,000

Required:

1) Determine pension expense for the year.

2) Prepare the journal entries to record pension expense (only the one with pension expense).

3) Determine the amount of the net pension asset or liability that will be reported on the Companys December 31 balance sheet.