Answered: Blossom Corp. sponsors a defined…

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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Question

Blossom Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan.

Plan assets (market-related value)	$480,000
Projected benefit obligation	650,000
Pension asset/liability	170,000	Cr.
Prior service cost	80,000
Net gain or loss (debit)	85,000

As a result of the operation of the plan during 2020, the actuary provided the following additional data for 2020.

Service cost	$99,000
Settlement rate, 9%; expected return rate, 10%
Actual return on plan assets	42,000
Amortization of prior service cost	25,000
Contributions	124,000
Benefits paid retirees	82,000
Average remaining service life of active employees	10	years

Using the preceding data, compute pension expense for Blossom Corp. for the year 2020 by preparing a pension worksheet that shows the journal entry for pension expense. (Enter all amounts as positive.)

PLEASE FIX THE INCORRECT ANSWERS MARKED IN RED. PICTURE BELOW FOR REFERENCE. THANK YOU...

Items
Expense
Casn
Service Cost
LOSS
Liapiiity
ODIigation
ASsets
Balance, Jan. 1, 2020
170000TCr. v
650000
TCr. v
480000T Dr. V
Service cost
99000T Dr. v
99000 Cr. v
Interest cost
58500T Dr. v
58500T Cr.
Actual return
42000TCr. v
42000
Dr. V
Unexpected loss
6000Cr. v
6000 Dr. v
Amortization of PSC
25000 Dr. v
Dr.
Amortization of loss
O |
Cr. V
2000Cr.
(2000) Dr. v
Contributions
124,000TCr. v
124,000T Dr. v
Benefits
Dr. V
82,000TCr. v
Journal entry for 2020
(134,500) T Dr.
124000T Cr. v
25000TCr. v
4000T Dr. V
Dr. V
(10500)
Cr. V
Accumulated OCI, Dec. 31, 2019
80000 Dr. v
85,000 Dr. v
Balance, Dec. 31, 2020
55000T Dr. V
89,000 Dr.
OT Cr. V
(723,500) T Cr. ♥
564,000T Dr.
. v
Use the market-related asset value to compute the expected return and for corridor amortization.
Expected return
48,000
Corridor amortization
2,000
n000 n031 1 ka JWil

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