Husky Company maintains a defined benefit pension with First Hartford Trust. Below are the balances...
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Accounting
Husky Company maintains a defined benefit pension with First Hartford Trust. Below are the balances reported by First Hartford on January 1, 2017:
Plan Benefit Obligation $520,000 Plan Assets $650,000
At the beginning of 2017, First Hartford informed Husky that its assumptions for the last five years have been off slightly, and they need to deposit an additional $150,000. Other matters for 2017 are:
The settlement rate is 10%. The current service cost is $40,000. Expected earnings are 8%. Actual earnings are $62,000. Prior service cost amortization is $25,000. First Hartford Trust paid retirement benefits of $35,000. Husky funded the plan $80,000.
Prepare the pension expense entry for 2017.
Determine the balance in the Pension Asset/Liability account stating if it is an asset or a liability.
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