Additional Pension Liability Derosa Company has a defined benefit pension plan for its employees. Prior to 2007 the company has not had an additional pension liability. At the end of 2007 the company’s actuary developed the following information regarding its pension plan:
|
Projected benefit obligation |
$1,429,000 |
|
Accumulated benefit obligation |
987,000 |
|
Plan assets (fair value) |
852,000 |
|
Unrecognized prior service cost |
200,000 |
Required
1. Calculate the additional pension liability required at the end of 2007 and prepare the appropriate journal entry, assuming that the company had a prepaid/accrued pension cost (liability) of $73,000 before considering the preceding information.
2. Repeat Requirement 1 assuming, instead, that the company had a prepaid/accrued pension cost (asset) of $46,000.
3. Indicate how the liability and asset in Requirement 2 would be disclosed on the 2007 ending balance sheet.