2. Big City provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000 while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a 5 year period, beginning this year. Finally assume the City is amortizing a deferred inflow resulting from a change in plan assumptions from a prior year in the amount of $10,000 per year. Required: Prepare journal entries to record annual pension expense for the enterprise
2. Big City provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000 while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a 5 year period, beginning this year. Finally assume the City is amortizing a deferred inflow resulting from a change in plan assumptions from a prior year in the amount of $10,000 per year. Required: Prepare journal entries to record annual pension expense for the enterprise
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
2. Big City provides a defined benefit pension plan for employees of the city water department,
an enterprise fund. Assume that the service cost component is $420,000, and interest on the
pension liability is $380,000 for the year. Actual returns on plan assets for the year were
$300,000 while the projected level of earnings on plan investments was $360,000. This
difference is to be amortized over a 5 year period, beginning this year. Finally assume the
City is amortizing a deferred inflow resulting from a change in plan assumptions from a prior
year in the amount of $10,000 per year.
Required: Prepare
Transcribed Image Text:ACC 4310 Governmental and Non-profit Accounting
Final Examination
Problems #2a and #2b
a
Big City
Water Department Enterprise Fund
Account
DR
CR
1
2
3
b
Eastville City
Water Department Enterprise Fund
1
2
3
12/31/2017
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