Van Persie Corp. sponsors a defined-benefit pension plan for its employees. The following balances related to the plan exist on December 31, 2009.
Plan assets (market value) $450,000
Projected benefit obligation 600,000
Pension asset/liability 150,000 Cr.
Van Persie amends the pension plan, effective 1/1/2010, and the actuary informs Van Persie that the Prior Service Cost associated with the amendment equals $90,000.
As a result of the operation of the plan during 2010, the actuary provided the following additional data on December 31, 2010.
Service cost for 2010 $ 75,000Actual return on plan assets in 2010 45,000Amortization of prior service cost 20,000Contributions in 2010 115,000Benefits paid retirees in 2010 70,000Settlement rate 7%Expected return rate 8%
Instructions
(a) Compute pension expense for Van Persie Corp. for the year 2010 by preparing the attached pension worksheet.
(b) Prepare the journal entry for pension expense.