Question
The pension plan for General GAP, U.S. company, ended Year 6 with a fair value of plan assets and projected benefit obligation of $930,000 and
The pension plan for General GAP, U.S. company, ended Year 6 with a fair value of plan assets and projected benefit obligation of $930,000 and $850,000, respectively. The following information pertains to Year 7 for the plan:
Plan contributions: $110,000
Plan benefits paid: $95,000
Service cost: $275,000
Other Comprehensive Income Balances:
- Unrecognized prior serivice cost goes from $225,000 at the end of Year 6 to $210,000 at the end of Year 7
- Current prior service cost: $10,000
- Unrecognized pension gain goes from $85,000 at the end of Year 6 to $90,000 at the end of Year 7
- Current pension gain: $12,000
Discount Rate: 8%
Expected (and Actual) Return on Plan Assets: 9%
Tax Rate: 30%
5-Provide the journal entries (including deferred tax impacts) for each of the following events as of the end of Year 7:
a-Contribution to the pension plan
b-Current Year Net Gain
c-Current Year Prior Service Cost
d-Service Cost
e-Interest Cost
f-Return on Plan Assets
g-Amortization of Prior Service Cost
h-Amortization of Net Gain
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