U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020.
Plan assets $420,000
Projected benefit obligation 350,000
U.S.M.’s actuary determined that 2021 service cost is $62,000. Both the expected and actual rate of return on plan assets are 10%. The
interest (discount) rate is 4%. U.S.M. contributed $122,000 to the pension fund at the end of 2021, and retirees were paid $46,000 from
plan assets. (Enter you answers in millions (i.e., 10,000,000 should be entered as 10).)
Required:
1. What is the pension expense at the end of 2021?
2. What is the projected benefit obligation at the end of 2021?
3. What is the plan assets balance at the end of 2021?
4. What is the net pension asset or net pension liability at the end of 2021?
5. Prepare journal entries to record the (a) pension expense, (b) funding of plan assets, and (c) retiree benefit payments.