Pension data for Barry Financial Services Inc. include the following: ($ in 0008) $ 470 Discount...

Question

Pension%20data%20for%20Barry%20Financial%20Services%20Inc.%20include%20the%20following:%20($%20in%200008)%20$%20470%20Discount...

Pension data for Barry Financial Services Inc. include the following:

( $ in 000s)
Discount rate, 7%
Expected return on plan assets, 11%
Actual return on plan assets, 10%
Service cost, 2018	$ 470
January 1, 2018:
Projected benefit obligation	3,100
Accumulated benefit obligation	2,800
Plan assets (fair value)	3,200
Prior service cost-AOCI (2018 amortization, $45)	405
Net gain-AOCI (2018 amortization, $12)	490
There were no changes in actuarial assumptions.
December 31, 2018:
Cash contributions to pension fund, December 31, 2018	405
Benefit payments to retirees, December 31, 2018	430

Required:

1. Determine pension expense for 2018

2. Prepare the journal entries to record pension expense, gains and losses (if any), funding, and retiree benefits for 2018.

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Determine pension expense for 2018. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5).)

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Pension expense is the sum which the employer puts into an account that is invested to pay for the retirement benefits for the worker. The employee is paid a set amount following his or her retirement every year at a certain time.

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Joseph Walsh · Accepted Answer

1. Pension expenses = $368

Explanation;

Particulars	The amount
Service Cost	$470
Interest Rate	$217
Expected Return on Asset	$(352)
Amortization of Prior Service Charges	$45
Amortization Net Gain	$(12)
Pension expenses	$368

2. General Journal

Record Pension Expense

Sl. No	Account Title and Explanation	Debit	Credit
1	Pension expenses	$368
	Plan Asset ( Expected Plan Asset)	$352
	Net Gain - AOCCI	$12
	Prior Service Cost - OCI		$45
	PBO ($470+$217)		$687

Record Asset Gains or Losses

Sl. No	Account Title and Explanation	Debit	Credit
2	Loss OCI	$32
	Plan Asset		$32

Keep track of the funding

Sl. No	Account Title and Explanation	Debit	Credit
3	Plan Asset	$405
	Cash		$405

Record Retaire Benefit

Sl.No	Account Title and Explanation	Debit	Credit
4	Projected Benefit Obligation	$430
	Plan Asset		$430

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