Computation of Prior Service Cost Amortization and Minimum Liability
The information below was provided relative to the pension plan for Atlas Wholesale Company for the years 2008–2010:
|
|
January 1, |
December 31, |
December 31, |
December 31, |
|
2008 |
|
2008 |
2009 |
2010 |
|
Accrued pension cost |
$ 985 |
|
|
|
|
PBO |
27,525 |
$29,700 |
$32,600 |
$39,000 |
|
ABO |
22,900 |
23,800 |
29,300 |
37,000 |
|
Fair value of the pension fund |
23,600 |
24,200 |
27,900 |
31,500 |
|
Net pension expense exclusive of prior service cost amortization |
|
1,920 |
2,410 |
2,860 |
|
Contributions made to pension fund |
|
2,970 |
2,510 |
2,410 |
|
Unrecognized net pension loss (gain) |
2,520 |
1,145 |
1,445 |
3,795 |
|
Unrecognized prior service cost |
420 |
0 |
0 |
0 |
Instructions:
1. Compute the amount of net periodic pension expense for each of the three years.
2. Prepare the journal entries for recording the net pension expense and the pension funding for the three years.
3. Compute any additional liability to be recorded for each of the three years under the minimum liability requirements of FASB Statement No. 87.
4. Identify the pension balance sheet accounts and their amounts as of December 31,
2010.