(Pension Worksheet with reconciliation Schedule)
Buhl Corp. sponsors a defined benefit plan for its employees. On January 1, 2008, the following balances relate to his plan:
Plan assets $480,000
Project benefit obligation 625
Prepaid/accrued pension cost(credit) 45,000
Unrecognized prior service cost 100,000
As a result of the operation of the plan during 2008, the following additional data are provided by the actuary.
1) Service cost $90,000
2) Settlement rate 9%
3) Actual return on plan assets in 2008 57,000
4) Amortization of prior service cost 19,000
5) Expected return on plan asset 52,000
6) Unexpected loss from change in projected benefit 76,000
obligation, due to change in actual predictions
7) Contributions in 2005 99,000
8) Benefits paid retirees in 2008 85,000
a) Using the data above, compute pension expense for Buhl Corp. for the year 2008 by preparing a pension workheet that shows the journal entry for pension expense and the year-end balances related pension account.
b) At December 31, 2008, prepare a schedule reconciling the funded status of the plan with pension amount reported on the balance sheet.
The expert prepares a pension worksheet and journal entries for pension expenses.