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Vaughn Company sponsors a defined benefit pension plan

Finance

Vaughn Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021.

 

 

 

2020 2021

Plan assets (fair value), December 31. $796,860 $967,860

Projected benefit obligation, January1 798,000 912,000

Pension asset/liability, January1 159,600 Cr. ?

Prior service cost, January1 285,000 273,600

Service cost 68,400 102,600

Actual and expected return on plan asset. 27,360 34,200

Amortization of prior service cost. 11,400. 13,680

Contributions (funding) 131,100 136,800

Accumulated benefit obligation, December31 570,000 627,000

Interest/settlement rate 9% 9%

 

-compute pension expense for 2020 and 2021.

 

-prepare the journal entries to record the pension expense and the company's funding of the pension plan for both years.

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