Brown Corp sponsors a defined benefit pension plan for its employees. On Jan 1, 2021, thefollowing balances relate to this plan:Plan asset$471,000Projected benefit obligation618,600Pension asset/liability147,600Accumulated OCI (PSC)101,300 Dr.As a result of the operation of the plan during 2021, the following additional data are provided:Service costSettlement rate, 8%$93,100Actual return on plan assets56,300Amortization of prior service cost18,200Expected return on plan assets53,500Unexpected loss from change in projected benefit obligation, due to change in actuarialpredictionsContributionsBenefits paid retirees74,700101,60082,700What is the pension expense Brown should debit in 2021:$100,402$97,068$110,372$107,288

The objective of the question is to calculate the pension expense that Brown Corp should debit in…

Answered: Brown Corp sponsors a defined benefit…

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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Sweet Company provides the following information about its defined benefit pension plan for the year 2020. Service cost $91,000 Contribution to the plan 106,400 Prior service cost amortization 10,800 Actual and expected return on plan assets 65,200 Benefits paid 40,500 Plan assets at January 1, 2020 633,900 Projected benefit obligation at January 1, 2020 701,600 Accumulated OCI (PSC) at January 1, 2020 149,900 Interest/discount (settlement) rate 9 % Prepare a pension worksheet inserting January 1, 2020, balances, showing December 31, 2020. (Enter all amounts as positive.)
The following information pertains to Foundry Inc.'s defined benefit pension plan: 2021 2022 Beginning Beginning ($ in thousands) balances balances Projected benefit obligation $ ( 6,100) $ (6,604) Plan assets 5,800 6,436 Prior service cost-AOCI 610 575 Net loss-AOCI 2$ 730 2$ 816 At the end of 2021, Foundry contributed $715 thousand to the pension fund and benefit payments of $624 thousand were made to retirees. The expected rate of return on plan assets was 11%, and the actuary's discount rate is 8%. There were no changes in actuarial estimates and assumptions regarding the PBO. What is the 2021 pension expense for Foundry's plan? Multiple Choice $625 thousand. None of these are correct. $532 thousand. $603 thousand.
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Sandhill Company provides the following information about its defined benefit pension plan for the year 2025. Service cost Contribution to the plan $91,600 104,400 Prior service cost amortization 10,800 Actual and expected return on plan assets 64,600 Benefits paid 40,300 Plan assets at January 1, 2025 650,000 Projected benefit obligation at January 1, 2025 692,000 Accumulated OCI (PSC) at January 1, 2025 150,000 Interest/discount (settlement) rate 11% (a) Prepare a pension worksheet inserting January 1, 2025, balances, showing December 31, 2025. (Enter all amounts as positive.
) Maytag Service Co. reported the following for its defined-benefit pension plan for 2021: Settlement rate 3% Expected rate of return on plan assets 6.5% Service cost $750,000 Actual return on plan assets $460,000 Benefits paid to retirees $485,000 Average remaining service life of existing employees 10 years Projected…
On January 1, 2020, Blue Company has the following defined benefit pension plan balances. Projected benefit obligation $4,506,000 Fair value of plan assets 4,220,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $508,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $152,000 $179,000 Prior service cost amortization 0 91,000 Contributions (funding) to the plan 237,000 281,000 Benefits paid 202,000 284,000 Actual return on plan assets 253,200 262,000 Expected rate of return on assets 6 % 8 %
Blossom Corp. sponsors a defined benefit pension plan for its employees. On January I, 2025, the following balances relate to this plan. Plan assets: $460,000 Projected benefit obligation: $606,500 Pension asset/liability: $146,500 Accumulated OCI (PSC): 104,200 Dr. As a result of the operation of the plan during 2025, the following additional data are provided by the actuary. Service cost: $93,500 Settlement rate, 10% Actual return on plan assets: $54,600 Amortization of prior service cost: $18,100 Expected return on plan assets: $51,600 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions: $76,600 Contributions: $100,500 Benefits paid retirees: $84,300 Using the data above, compute pension expense for Blossom for the year 2025 by preparing a pension worksheet. (Enter all amounts as positive.)
Buffalo Enterprises provides the following information relative to its defined benefit pension plan. Balances or Values at December 31, 2020 Projected benefit obligation $2,761,900 Accumulated benefit obligation 1,970,300 Fair value of plan assets 2,283,700 Accumulated OCI (PSC) 207,900 Accumulated OCI—Net loss (1/1/20 balance, 0) 45,600 Pension liability 478,200 Other pension plan data for 2020: Service cost $94,400 Prior service cost amortization 42,000 Actual return on plan assets 128,900 Expected return on plan assets 174,500 Interest on January 1, 2020, projected benefit obligation 251,500 Contributions to plan 94,200 Benefits paid 141,200 (a) Prepare the note disclosing the components of pension expense for the year 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension…
rane importers provides the following pension plan Fair value of pension plan assets, January 1, 2025 Fair value of pension plan assets, December 31, 2025 Contributions to the plan in 2025 Benefits paid retirees in 2025 Tormation. Actual return on plan assets for 2025 $ $2,575,000 2,914,000 299,000 366,000 From the data above, compute the actual return on the plan assets for 2025.
Wildhorse Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $817,830 $993,330 Projected benefit obligation, January 1 819,000 936,000 Pension asset/liability, January 1 163,800 Cr. ? Prior service cost, January 1 292,500 280,800 Service cost 70,200 105,300 Actual and expected return on plan assets 28,080 35,100 Amortization of prior service cost 11,700 14,040 Contributions (funding) 134,550 140,400 Accumulated benefit obligation, December 31 585,000 643,500 Interest/settlement rate 10 % 10 % Prepare the journal entries to record the pension expense and the company’s funding of the pension plan for both years.
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2021, the following pension-related data were available: ($ in thousands) Net gain—AOCI $ 170 Accumulated benefit obligation 1,170 Projected benefit obligation 1,400 Fair value of plan assets 1,100 Average remaining service period of active employees (expected to remain constant for the next several years) 15 years The rate of return on plan assets during 2021 was 9%, although it was expected to be 10%. The actuary revised assumptions regarding the PBO at the end of the year, resulting in a $23,000 decrease in the estimate of that obligation. Required:1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2021.2. Assume the net pension expense for 2021, not including the amortization of the net gain component, is $325,000. What is pension expense for the year?3. Determine the net loss—AOCI or net gain—AOCI as of…
On January 1, 2022, Seascape Ltd. reported the following balances relating to their defined benefit pension plan. Seascape Ltd. uses ASPE. Defined benefit obligation $ 2,100,000 Fair value of plan assets. 1,900,000 Other data related to the pension plan for 2022 are: Current service cost 110,000 Contributions to the plan 105,000 Benefits paid.. 180,000 Actual return on plan assets. 142,000 Interest (discount) rate 7% Past service costs, Jan 1 120,000 Actuary adjustment, Dec 31 220,000 Pension Asset/Liability account on Balance Sheet Instructions a) Calculate the defined benefit obligation at December 31, 2022. b) Calculate the fair value of plan assets at December 31, 2022. c) Calculate pension expense for 2022. d) Prepare the journal entries to record the pension expense and the contributions for 2022. e) How would your answer be different if the company used IFRS? f) What is the funded status of the plan on December 31, 2022? Indicate whether it is underfunded or overfunded.

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