Entries to Record Accrual and Funding of Pension Costs
United Rental Company reported the following information related to its pension plan for the years 2008–2011. The fund is administered by a separate outside trustee.
|
|
Pension Expense |
|
Benefit Payments |
Actual Return on |
|
Year |
Accrual |
Contribution |
to Retirees |
the Pension Fund |
|
2008 |
$720,400 |
$675,000 |
$350,000 |
$320,000 |
|
2009 |
810,100 |
700,000 |
350,000 |
350,000 |
|
2010 |
695,700 |
725,000 |
300,000 |
410,000 |
|
2011 |
790,000 |
680,000 |
375,000 |
505,000 |
Instructions:
1. Prepare the required summary journal entries for each year to record applicable pension items.
2. Assuming that United had an accrued pension liability of $41,000 at January 1, 2008, compute the prepaid/accrued pension account balance at December 31, 2011.
3. Assuming that the fair value of the pension fund at January 1, 2008, was $3,200,000, compute the fair value of the pension fund at December 31, 2011.