Fountain Limited sponsors a defined-benefit pension plan for its employees. On January 1,2020 the following balances related to this plan: Plan assets at fair value 450,000 Defined Benefit Obligation $600,000 As a result of the operations of the plan during 2020, the actuary provided the following additional data at December 31,2020. Service cost for 2020 75,000 Actual return on plan assets in 2020 45,000 Past service cost, effective Jan 01 2020 120,000 Contributions in 2020 115,000 Benefits paid to retirees in 2020 70,000 Discount Rate 8% Average remaining service life of active employees 35 years Required: a. Compute pesion expense for Howard Corp. for the year 2020 by preparing a pension worksheet. b. Prepare the journal entries relating to pension for the year 2020.
Fountain Limited sponsors a defined-benefit pension plan for its employees. On January 1,2020 the following balances related to this plan: Plan assets at fair value 450,000 Defined Benefit Obligation $600,000 As a result of the operations of the plan during 2020, the actuary provided the following additional data at December 31,2020. Service cost for 2020 75,000 Actual return on plan assets in 2020 45,000 Past service cost, effective Jan 01 2020 120,000 Contributions in 2020 115,000 Benefits paid to retirees in 2020 70,000 Discount Rate 8% Average remaining service life of active employees 35 years Required: a. Compute pesion expense for Howard Corp. for the year 2020 by preparing a pension worksheet. b. Prepare the journal entries relating to pension for the year 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Fountain Limited sponsors a defined-benefit pension plan for its employees. On January 1,2020 the following balances related to this plan:
| Plan assets at fair value | 450,000 |
| Defined Benefit Obligation | $600,000 |
As a result of the operations of the plan during 2020, the actuary provided the following additional data at
December 31,2020.
| Service cost for 2020 | 75,000 |
| Actual return on plan assets in 2020 | 45,000 |
| Past service cost, effective Jan 01 2020 | 120,000 |
| Contributions in 2020 | 115,000 |
| Benefits paid to retirees in 2020 | 70,000 |
| Discount Rate | 8% |
| Average remaining service life of active employees | 35 years |
Required:
a. Compute pesion expense for Howard Corp. for the year 2020 by preparing a pension worksheet.
b. Prepare the
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