Crane Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020. January 1, 2020 December 31, 2020 Projected benefit obligation $1,499,000 $1,527,000 Market-related and fair value of plan assets 802,000 1,127,200 Accumulated benefit obligation 1,622,000 1,742,500 Accumulated OCI (G/L)—Net gain 0 (199,900 ) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $120,500. The company’s actual funding (contributions) of the plan in 2020 amounted to $245,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,205,000 on January 1, 2020. Assume no benefits paid in 2020. (c) New attempt is in progress. Some of the new entries may impact the last attempt grading. Your answer is partially correct. 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) $ $ Crane Company Comprehensive Income Statement $XXXX $ $XXXX Crane Company Balance Sheet (Partial) $ $

Crane Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020.

The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $120,500. The company’s actual funding (contributions) of the plan in 2020 amounted to $245,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,205,000 on January 1, 2020. Assume no benefits paid in 2020.

(c)

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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	January 1, 2020	December 31, 2020
Projected benefit obligation	$1,499,000	$1,527,000
Market-related and fair value of plan assets	802,000	1,127,200
Accumulated benefit obligation	1,622,000	1,742,500
Accumulated OCI (G/L)—Net gain	0	(199,900	)

Crane Company
Balance Sheet (Partial)

New attempt is in progress. Some of the new entries may impact the last attempt grading.

Your answer is partially correct.

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)

		$

		$

Crane Company Comprehensive Income Statement
		$XXXX

	$


		$XXXX

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Step 1

SOLUTION

CALCULATION OF PENSION EXPENSE-

SERVICE COST	78000
INTEREST ON PBO (1499000*10%)	149900
AMORTIZATION OF PRIOR SERVICE COST	120500
EXPECTED RETURN ON PLAN ASSETS (802000*10%)	-80200
PENSION EXP	268200

2- PENSION ASSET /LIABILITIES -

= (245000+120500+199900)-268200 = 297200.

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