Task: Pension data for Sam Adams Inc. include the following for the 2005 calendar year:
Discount rate, 9%
Expected return on plan assets, 9%
Actual return on plan assets, 8%
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 entry to record pension expense and funding for the year.