E20-12. Ferreri Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2012: projected benefit obligation, Jan 1 2012 = 1,419,400 Dec 31 2012 = 1,455,200; market-related and fair value of plan assets, jan 1 2012 = 802,700 dec 31 2012 = 1,233,170; accumulated benefit obligation jan 1 2012 = 1,600,000 dec 31 2012 = 1,720,000; accumulated OCI (G/L)- net gain jan 1 2012 = 0 dec 31 2012 = (191,940). The service cost component of pension expense for employee services rendered in the current year amounted to $85,800 and the amortization of prior service cost was $120,000. the company’s actual funding (contributions) of the plan in 2012 amounted to $3502,200. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,200,000 on Jan 1, 2012. Assume no benefits paid in 2012. instructions: (a) Determine the amounts of the components of pension expense that should be recognized by the company in 2012. (b) Prepare the journal entry to record pension expense and the employers contribution to the pension plan in 2012.
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