On January 1,2014,Reds Corporation adopted a defined benefit pension plan.The plan's service cost of $140,000 was fully funded at the end of 2014.Prior service cost was funded by a contribution of $50,000 in 2014.Amortization of prior service cost was $14,000 for 2014.What is the amount of Reds' prepaid pension cost at December 31,2014?

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Quizplus · Accepted Answer

The prepaid pension cost is calculated as the total contributions made minus the total pension expense. The service cost is $140,000, and the amortization of prior service cost is $14,000, totaling $154,000 in pension expense. Contributions were $140,000 for service cost and $50,000 for prior service cost, totaling $190,000. The prepaid pension cost is $190,000 - $154,000 = $36,000.

On January 1,2014,Reds Corporation Adopted a Defined Benefit Pension Plan