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U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020. Plan assets $600,000 Projected benefit obligation 450,000
U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020.
Plan assets | $600,000 |
Projected benefit obligation | 450,000 |
U.S.M.s actuary determined that 2021 service cost is $80,000. Both the expected and actual rate of return on plan assets are 8%. The interest (discount) rate is 4%. U.S.M. contributed $140,000 to the pension fund at the end of 2021, and retirees were paid $64,000 from plan assets. (Enter your answers in thousands (i.e., 10,000 should be entered as 10).) Required:
- What is the pension expense at the end of 2021?
- What is the projected benefit obligation at the end of 2021?
- What is the plan assets balance at the end of 2021?
- What is the net pension asset or net pension liability at the end of 2021?
- Prepare journal entries to record the (a) pension expense, (b) funding of plan assets, and (c) retiree benefit payments.
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