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2020 2021 2022 $50,000 $85,000 $180,200 44,700 165,300 289,100 60,000 200,400 326,100 Iculation) 78,800 83,971 end of year) 50,000 60,000 105,100

2020 2021 2022 $50,000 $85,000 $180,200 44,700 165,300 289,100 60,000 200,400 326,100 Iculation) 78,800 83,971 end of year) 50,000 60,000 105,100

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sunland Toothpaste Company initiates a defined benefit pension plan for its 50 employees on January 1, 2020. The insurance company which administers the pension plan provided the following selected information for the years 2020, 2021, and 2022. For Year Ended December 31, 2020 2021 2022 Plan assets (fair value) $50,000 $85,000 $180,200 Accumulated benefit obligation 44,700 165,300 289,100 Projected benefit obligation 60,000 200,400 326,100 Net (gain) loss (for purposes of corridor calculation) 78,800 83,971 Employer's funding contribution (made at end of year) 50,000 60,000 105,100 There were no balances as of January 1, 2020, when the plan was initiated. The actual and expected return on plan assets was 10% over the 3-year period, but the settlement rate used to discount the company's pension obligation was 13% in 2020, 11% in 2021, and 8% in 2022. The service cost component of net periodic pension expense amounted to the following: 2020, $60,000; 2021, $85,000; and 2022, $118,000. The average remaining service life per employee is 12 years. No benefits were paid in 2020, $30,000 of benefits were paid in 2021, and $18,400 of benefits were paid in 2022 (all benefits paid at end of year).
Transcribed Image Text:Sunland Toothpaste Company initiates a defined benefit pension plan for its 50 employees on January 1, 2020. The insurance company which administers the pension plan provided the following selected information for the years 2020, 2021, and 2022. For Year Ended December 31, 2020 2021 2022 Plan assets (fair value) $50,000 $85,000 $180,200 Accumulated benefit obligation 44,700 165,300 289,100 Projected benefit obligation 60,000 200,400 326,100 Net (gain) loss (for purposes of corridor calculation) 78,800 83,971 Employer's funding contribution (made at end of year) 50,000 60,000 105,100 There were no balances as of January 1, 2020, when the plan was initiated. The actual and expected return on plan assets was 10% over the 3-year period, but the settlement rate used to discount the company's pension obligation was 13% in 2020, 11% in 2021, and 8% in 2022. The service cost component of net periodic pension expense amounted to the following: 2020, $60,000; 2021, $85,000; and 2022, $118,000. The average remaining service life per employee is 12 years. No benefits were paid in 2020, $30,000 of benefits were paid in 2021, and $18,400 of benefits were paid in 2022 (all benefits paid at end of year).
Calculate the amount of net periodic pension expense that the company would recognize in 2020, 2021, and 2022. (Round answers to 0 decimal places, e.g. 2,525.) Pension expense for 2020 $ Pension expense for 2021 Pension expense for 2022 %24 %24
Transcribed Image Text:Calculate the amount of net periodic pension expense that the company would recognize in 2020, 2021, and 2022. (Round answers to 0 decimal places, e.g. 2,525.) Pension expense for 2020 $ Pension expense for 2021 Pension expense for 2022 %24 %24
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