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  3. defined benefit pension plan was initiated at the

Defined benefit pension plan was initiated at the beginning of Year 1 Retroactive benefits awarded...

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Accounting

Defined benefit pension plan was initiated at the beginning of Year 1 Retroactive benefits awarded but not funed on the adoption date = $2,180,000. Retro benefits to be amortized SL over average remaining service life of 16 years.
Actuarial & funding info ($):
Year 1:
Service Cost: 340,000
Beginning PBO: 2,180,000
Beginning Plan Asset FV: 0
Discount Rate: 10%
Expected LT ROR: -
Actual ROR: -
Plan Contributions made on last day of year: 670,000
Ending PBO: -
Ending Plan Asset FV: -
Year 2:
Service Cost: 348,000
Beginning PBO: 2,738,000
Beginning Plan Asset FV: 670,000
Discount Rate: 10%
Expected LT ROR: 9%
Actual ROR: 8%
Plan Contributions made on last day of year: 700,000
Ending PBO: 3,359,800
Ending Plan Asset FV: 1,423,600
1. Compute Pension Expense for Year 1 and Year 2.
2. Prepare Pension Plan Journal Entrys for Year 1 and Year 2.
3. Track balances in PBO & Plan Asset T accounts over the 2 years. At the end of each year, indicate if a net pension asset or a net pension liability would be reported and specify the dollar amount.

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