Crane Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $56,000. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $145,023 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $894,700, an accumulated benefit obligation of $803,700, and a debit balance of $397,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $595,600 at the beginning of the year. The actual and expected return on plan assets was $53,900. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $49,500 in 2020. Amortization of net gain or loss was not required in 2020. Collapse question part (a) Determine the amounts of the components of pension expense that should be recognized by the company in 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 Expense Service Cost $56,000 Interest on Projected Benefit Obligation 80,523 Expected Return on Plan Assets (53,900) Amortization of Prior Service Cost 49,500 Pension Expense $132,123 Collapse question part (b) Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Pension Expense 132,123 Pension Asset/Liability 62,400 Cash 145,023 Other Comprehensive Income (PSC) 49,500 Collapse question part (c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Crane Company for the year 2020. Crane Company Income Statement (Partial) choose the accounting period select an income statement item select an income statement item $enter a dollar amount Crane Company Comprehensive Income Statement choose the accounting period select a comprehensive income item $XXXX select an opening section name select a comprehensive income item enter a dollar amount select a closing name for this statement $XXXX Crane Company Balance Sheet (Partial) choose the accounting period select an opening name for section one select a balance sheet item $enter a dollar amount select an opening name for section two select a balance sheet item
Crane Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid.
1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $56,000.
2. The company’s funding policy requires a contribution to the pension trustee amounting to $145,023 for 2020.
3. As of January 1, 2020, the company had a projected benefit obligation of $894,700, an accumulated benefit obligation of $803,700, and a debit balance of $397,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $595,600 at the beginning of the year. The actual and expected return on plan assets was $53,900. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid.
4. Amortization of prior service cost was $49,500 in 2020. Amortization of net gain or loss was not required in 2020.
Collapse question part
(a)
Determine the amounts of the components of pension expense that should be recognized by the company in 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 Expense
Service Cost
$56,000
Interest on Projected Benefit Obligation
80,523
Expected Return on Plan Assets
(53,900)
Amortization of Prior Service Cost
49,500
Pension Expense
$132,123
Collapse question part
(b)
Prepare the
Account Titles and Explanation
Debit
Credit
Pension Expense
132,123
Pension Asset/Liability
62,400
Cash
145,023
Other Comprehensive Income (PSC)
49,500
Collapse question part
(c)
Indicate the pension-related amounts that would be reported on the income statement and the
Crane Company
Income Statement (Partial)
choose the accounting period
select an income statement item
select an income statement item
$enter a dollar amount
Crane Company
Comprehensive Income Statement
choose the accounting period
select a comprehensive income item
$XXXX
select an opening section name
select a comprehensive income item
enter a dollar amount
select a closing name for this statement
$XXXX
Crane Company
Balance Sheet (Partial)
choose the accounting period
select an opening name for section one
select a balance sheet item
$enter a dollar amount
select an opening name for section two
select a balance sheet item
$enter a dollar amount
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