Comprehensive Practice Exam
Pensions
Presented below is information related to Stage Department Stores, Inc. pension plan for 2015.
Service cost $550,000
Funding contribution for 2015 530,000
Settlement rate used in actuarial computation 10%
Expected return on plan assets 9%
Amortization of PSC (due to benefit increase) 90,000
Amortization of unrecognized net gains 48,000
Projected benefit obligation (at beginning of period) 540,000
Fair value of plan assets (at beginning of period) 360,000
Instructions
(a) Compute the amount of pension expense to be reported for 2015. (Show computations.)
(b) Prepare the journal entry to record pension expense and the employer's contribution for 2015.