(Pension Expense, Journal Entries) Ultra-Home Corporation provides the following information related to its defined-benefit pension plan for 2010.
Pension liability (January 1) $ 500,000
Accumulated benefit obligation (December 31) 1,250,000
Actual and expected return on plan assets 15,000
Contributions (funding) in 2010 210,000
Fair value of plan assets (December 31) 960,000
Settlement rate 8%
Projected benefit obligation (January 1) 1,500,000
Service cost 165,000
Chapter 20 Accounting for Pensions and Postretirement Benefits (L0 4, 6, 7, 8, 9) (L0 4) (L0 5)
(a) Compute pension expense and prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2010. (b) Indicate the pension-related amounts that would be reported in the company's income statement and balance sheet for 2010.
See guidance attached in excel showing how to gather the expense amount and how the balance sheet and income statement are impacted.