Question: Kramer Co. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and completing the accounting tasks related to the pension plan for 2017.

Instructions (a) Determine the missing amounts in the 2017 pension worksheet, indicating whether the amounts are debits or credits. (b) Prepare the journal entry to record 2017 pension expense for Kramer Co. (c) Determine the following for Kramer for 2017: (1) settlement rate used to measure the interest on the liability and (2) expected return on plan assets.

Particulars

Annual pension expense

Cash

OCI-Prior service cost

OCI-Gain/Loss

Pension asset/liability

Projected benefit obligation

Plan assets

Balance Jan 1, 2017

.

$120,000 Cr.

$325,00 Cr.

$205,000 Dr.

Service cost

$20,000 Dr.

$20,000 Cr.

Interest cost

$26,000 Dr.

$26,000 Cr.

Actual return

$18,000 Cr.

$18,000 Dr.

Unexpected loss

$2,500 Cr.

$2,500 Dr.

Amortization of PSC

$35,000 Dr.

$35,000 Cr.

Contributions

$41,000 Cr.

$41,000 Dr.

Benefits

$15,000 Dr.

$15,000 Cr.

Increase in PBO

$43,500 Dr.

$43,500 Cr.

Journal entry for 2018

$60,500 Dr.

$41,000 Cr.

$35,000Cr.

$46,000 Dr.

$30,500 Cr.

Accumulated OCI Dec 31, 2016

$80,000 Dr.

0

Balance Dec 31, 2017

$45,000 Dr.

$46,000Dr.

$150,500 Cr.

$399,500Cr.

$249,000 Dr.

Date

Particulars

Debit

Credit

2017

Pension Expense

$60,500

Other comprehensive income (gain/loss)

$46,000

Cash

$41,000

Pension asset/liability

$30,500

Other comprehensive income (PSC)

$35,000

(To record the pension expense)