Thorp Inc. maintains a defined benefit pension plan for its

Thorp Inc. maintains a defined benefit pension plan for its employees. Pension plan balances as at January 1, 2020 include:

Projected Benefit Obligation (PBO), January 1, 2020

$ 600,000

Plan assets at market-related value, January 1, 2020

$ 550,000

Prior service cost (PSC- OCI)1

$ 150,000

Average remaining service period

15 years

Service cost

$ 90,000

Expected returns on plan assets

8%

Actual returns earned on plan assets

$40,000

Actuarial interest rate

4%

Contributions paid

$ 150,000

Benefits to retirees in 2020

$ 100,000

Loss from change in actuarial assumption, December 31, 2020

$ 46,000

These prior service costs are from 2019 and already included in PBO on January 1,2020.

Required:

  1. Determine the pension expenses recognized in 2020.
  2. Prepare the journal entries to reflect the accounting for the pension plan for 2020.
  3. Prepare the ending balances (31 December 2020) for plan assets, PBO, and calculate net pension liability.
  4. What will be the expected impact of the current pandemic (Covid-19) on PBO?

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