Calculating Pension Expense and Pension Plan Surplus or Deficit
Fernando's

Calculating pension expense and pension plan surplus or deficit
Fernando's Furniture Inc. sponsors a defined benefit pension plan for its employees. The plan's trustee reports the following information for calendar 2020: $\begin{array}{ll}\text{ Defined benefit obligation, Jan 1 }............................................................ & \$ 240,000 \\\text{ Fair value of plan assets, Jan 1. }.............................................................. & 180,000 \\\text{ Current service cost } ...............................................................................& 80,000 \\\text{ Actual \& expected return on plan assets. }............................................... & 21,000 \\\text{ Contributions }........................................................................................ & 70,000 \\\text{ Benefits paid to retirees } ..........................................................................& 120,000 \\\text{ Interest (discount) rate } ........................................................................... & 10\% \\\text{ Past service costs (as of Ian 1 ) } ................................................................& 10,000 \\ \end{array}$
The corporation uses ASPE.
Instructions
a) Calculate the amount of pension expense for 2020, and prepare the required adjusting journal entries.
b) Calculate the surplus or deficit of the plan on December 31, 2020.