age Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $198,200; projected benefit obligation $251,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021Annual service cost $16,300 $19,100 $26,400 Settlement rate and expected rate of return 10% 10% 10%Actual return on plan assets 18,400 21,870 24,000 Annual funding (contributions) 16,300 39,200 47,700 Benefits paid 14,200 16,100 21,400 Prior service cost (plan amended, 1/1/20) 161,700 Amortization of prior service cost 54,100 41,700 Change in actuarial assumptions establishesa December 31, 2021, projected benefit obligation of: 524,600 a. How to prepare a pension worksheet presenting all 3 years’ pension balances and activities.

Pension expense is the sum that a company deducts from revenue in order to cover its obligations for…

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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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age Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $198,200; projected benefit obligation $251,000. Other data relating to 3 years’ operation of the plan are as follows.

	2019		2020		2021
Annual service cost	$16,300			$19,100		$26,400
Settlement rate and expected rate of return	10	%		10	%	10	%
Actual return on plan assets	18,400			21,870		24,000
Annual funding (contributions)	16,300			39,200		47,700
Benefits paid	14,200			16,100		21,400
Prior service cost (plan amended, 1/1/20)				161,700
Amortization of prior service cost				54,100		41,700
Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of:						524,600

a. How to prepare a pension worksheet presenting all 3 years’ pension balances and activities.

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