Paul Dobson Company sponsors a defined benefit plan for its 100 employees. On January 1, 2010, the company's actuary provided the following information.
Unrecognized prior service cost $175,000
Pension plan assets (fair value and market-related asset value) $225,000
Accumulated benefit obligation $280,000
Projected benefit obligation $364,000
The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2010, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $64,000; the projected benefit obligation was $479,400; fair value of pension assets was $308,500; the accumulated benefit obligation amounted to $379,000. The expected return on the plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on the plan is $13,500. The company's current year's contribution to the pension plan amounted to $70,000. No benefits were paid during the year.
Instructions:
(Round to the nearest dollar)
(a) Determine the components of pension expense that the company would recognize in 2010.
(b) Prepare the journal entry to record the pension expense and the company's funding of the pension plan in 2010.
(c) Indicate the pension amounts reported in the financial statement as of December 31, 2010.