Pension data for Sam Adams Inc. include the following for the current calendar year: Discount rate, 8% Expected return on plan assets, 10% Actual return on plan assets, 9% Service cost, $400,000.
January 1:
PBO 3,000,000
ABO 2,000,000
Plan assets 3,200,000
Amortization of prior service cost 30,000
Amortization of net gain 7,000
December 31:
Cash contributions to pension fund $275,000
Benefit payments to retirees 310,000
Required: 1) Determine pension expense for the year. 2) Prepare the journal entries to record pension expense and funding for the year.