Reference no: EM131580192

Problem -

Sheridan Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017 in which no benefits were paid.

1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $55,900.

2. The company's funding policy requires a contribution to the pension trustee amounting to $154,300 for 2017.

3. As of January 1, 2017, the company had a projected benefit obligation of $898,000, an accumulated benefit obligation of $796,600, and a debit balance of $398,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $600,600 at the beginning of the year. The actual and expected return on plan assets was $54,300. The settlement rate was 10%. No gains or losses occurred in 2017 and no benefits were paid.

4. Amortization of prior service cost was $50,200 in 2017. Amortization of net gain or loss was not required in 2017.

Required -

(a) Determine the amounts of the components of pension expense that should be recognized by the company in 2017.

(b) Prepare the journal entry or entries to record pension expense and the employer's contribution to the pension trustee in 2017.