Presented below is information related to the pension plan of Ivanhoe Inc. for the year 2021. 1. The service cost related to pension expense is $233,000 using the projected benefits approach. 2. The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $313,000 and $266,000, respectively. The expected return on plan assets is 9% and the settlement rate is 10%. 3. The accumulated OCI – prior service cost at the beginning of the year is $133,000. The company has a workforce of 200 employees, all who are expected to receive benefits under the plan. The total number of service-years is 1,000 and the service-years attributable to 2021 is 200. The company has decided to use the years-of-service method of amortization for these costs. 4. At the beginning of the period, the fair value of pension plan assets was $266,000. The company had an Accumulated OCI (loss) at the beginning of the period of $83,000. Any amortization of unrecognized net loss is recognized on a straight-line basis over the average remaining service-life of the employees. 5. The contribution made to the pension fund in 2021 was $222,000. Determine the pension expense to be reported on the income statement for 2021 Prepare the journal entry to record pension expense for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Presented below is information related to the pension plan of Ivanhoe Inc. for the year 2021.

1.		The service cost related to pension expense is $233,000 using the projected benefits approach.
2.		The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $313,000 and $266,000, respectively. The expected return on plan assets is 9% and the settlement rate is 10%.
3.		The accumulated OCI – prior service cost at the beginning of the year is $133,000. The company has a workforce of 200 employees, all who are expected to receive benefits under the plan. The total number of service-years is 1,000 and the service-years attributable to 2021 is 200. The company has decided to use the years-of-service method of amortization for these costs.
4.		At the beginning of the period, the fair value of pension plan assets was $266,000. The company had an Accumulated OCI (loss) at the beginning of the period of $83,000. Any amortization of unrecognized net loss is recognized on a straight-line basis over the average remaining service-life of the employees.
5.		The contribution made to the pension fund in 2021 was $222,000.

Determine the pension expense to be reported on the income statement for 2021

Prepare the journal entry to record pension expense for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

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