Pension Sudoku

Get together with your group. Prepare one solution for your group.

The elements of a pension plan are interrelated. Its helpful to see how each element relates to the others. One way is to
bring each part together in a pension spreadsheet.
A partially completed pension spreadsheet showing the relationships among the elements that constitute Crabb-Stock
Companys defined benefit pension plan follows. Six years earlier, Teiber revised its pension formula and recalculated
benefits earned by employees in prior years using the more generous formula. The high quality corporate bond rate was
5%. Plan assets earned a return of $35,000, consisting of dividends, interest, and capital gains.
($ in 000s)

Balance, Jan. 1, 2015

Pension service cost
Current service cost
Past service cost
Net pension cost (income):
Interest rate x DBO
Interest rate x plan assets
Pension remeasurement cost:
Net return on assets (after interest)
Change in discount rate
Change in salary estimate
Change in employee turnover
Contribution to pension fund
Retiree benefits paid
Decrease (increase) in
comprehensive income during 2015
Balance, Dec. 31, 2015

Reported
Only

Recorded in Accounts

DBO

Plan
Assets

(500)

?
?

Service
CostNI

Net
Interest Cost
(Income)NI

?
?

?
(70)
?
?

?
?

?
?
?
?
37
(5)

4
?
?
?
?

(90)
152

Cash

100

Remeasurement
CostOCI

Net
Pension
(Deficit)/
Surplus

?
?
?
?
?
0

638

Notice that the first numerical column simply repeats the actuarys report of how the DBO changed during the year.
Likewise, the second column reproduces the changes in plan assets. The components of the service cost, pension
financing cost or income, and remeasurement cost are in the third, fourth, and fifth columns. The cash contribution to the
pension fund is the sole item in the next column.
The last column shows the changes in the funded status of the plan. Be sure to notice that the funded status is the
difference between the PBO (column 1) and the plan assets (column 2). That means that each of the changes we see in
either of the first two columns also is reflected as a change in the funded status in the last column. The net pension deficit
(or net pension surplus) balance is not carried in company records. Instead, we use this label to report the DBO and plan
assets in the balance sheet as a single net amount.
Notice that each change in a formal account (light-shaded columns) is reflected in exactly two of those columns.

Required:
1. Fill in the missing amounts.
2. Prepare the 2015 journal entries to record the pension costs, the cash contribution to plan assets, and
payment of retiree benefits.

3. Prepare the 2015 Statement of Comprehensive Income (combined statement of income and other
comprehensive income) assuming the following amounts excluding pension-related items:
Revenue
Operating expenses
Financing costs
Unrealized gains on investments at FVTOCI
Tax rate

$500
200
100
30
40%

Statement of Comprehensive Income

Crabb-Stock Company
Year ended December 31, 2015