Question
U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2015: Plan assets $400,000 Projected benefit obligation 320,000
U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2015:
Plan assets $400,000
Projected benefit obligation 320,000
U.S.M.s actuary determined that 2016 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the end of 2016, and retirees were paid $44,000 from plan assets.
Determine the following amounts at the end of 2016:
Pension Expense
Projected Benefit Obligation
Plan Assets
Net Pension Asset
Prepare journal entries to record the pension expense, funding of plan assets, and retiree benefit payments.
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