Blue Company sponsors a defined benefit pension plan for its employees. The following data relate...
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Accounting
Blue Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid.
1. The actuarial present value of future benefits earned by employees for service rendered in 2020 amounted to $56,000.
2. The company's funding policy requires a contribution to the pension trustee amounting to $144,494 for 2020.
3. As of January 1, 2020, the company had a projected benefit obligation of $896,600, an accumulated benefit obligation of $793,700 and a debt balance of $399,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $600,500 at the beginning of the year. The actual and expected return on plant assets was $53,800. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid.
4. Amortization of prior service cost was $50,000 in 2020. Amortization of net gain or loss was not required in 2020.
a) Determine the amounts of the components of pension expense that should be recognized by the company in 2020.
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