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Homework answers / question archive / Vaughn Company sponsors a defined benefit pension plan
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.
