Computation, Recording, and Funding of Pension Expense
Averon Industrial, Inc., computed the following components of pension expense for the years 2008–2010:
|
Components of Pension Expense |
(in thousands) |
||
|
|
2008 |
2009 |
2010 |
|
Service cost |
$330 |
$415 |
$580 |
|
Interest cost |
150 |
170 |
220 |
|
Actual return on the pension fund |
35 |
50 |
40 |
|
Expected return on the pension fund |
30 |
45 |
50 |
|
Amortization of unrecognized pension (gain) or loss— |
|
|
|
|
above corridor amount |
(20) |
(10) |
18 |
|
Amortization of unrecognized prior service cost |
70 |
90 |
90 |
|
Amount contributed to fund |
520 |
580 |
750 |
Instructions:
1. Compute the net periodic pension expense for the years 2008–2010.
2. Prepare the journal entries to record the computed pension expense in (1) and the funding of the pension plan.
3. If the prepaid pension cost balance at January 1, 2008,was $75,000, compute the balance of the prepaid/accrued pension cost account at December 31, 2010.