Presented below is information related to the pension plan of Sandhill Inc. for the year 2021. 1. The service cost related to pension expense is $250,000 using the projected benefits approach. 2. The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $330,000 and $300,000, 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 $150,000. 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 $300,000. The company had an Accumulated OCI (loss) at the beginning of the period of $100,000. 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 $239,000. Determine the pension expense to be reported on the income statement for 2021 Pension Expense $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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

1.		The service cost related to pension expense is $250,000 using the projected benefits approach.
2.		The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $330,000 and $300,000, 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 $150,000. 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 $300,000. The company had an Accumulated OCI (loss) at the beginning of the period of $100,000. 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 $239,000.

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

Pension Expense $

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