Gurung Co. has a noncontributory, defined benefit pension plan adopted on 1 January 20X5. On 31 December 20X5, the following information is available: For accounting purposes Interest rate used for pension amounts, 5%. Past service cost, granted as of 1 January 20X5, $360,000. This is also the defined benefit obligation on 1 January. Current service cost for 20X5, appropriately measured for accounting purposes, $83,000. For funding purposes Funding was $107,500 in 20X5 for all pension amounts. The payment was made on 31 December. Actual earnings on fund assets, zero. Required: 1. Prepare a pension spreadsheet that summarizes relevant pension data for 20X5. Answer is complete and correct. Pension Obligation Plan Assets Pension Expense Net Pension Asset/Liab. Accumulated OCI 20X5 Beginning - PSC $ 360,000 $ 0 $ 360,000 $ 0 $ 0 CSC 83,000 0 83,000 0 0 Interest 18,000 0 18,000 0 0 0 $ 461,000 461,000 0 Funding 107,500 107,500 0 $ 461,000 $ 107,500 $ 353,500 0 2. Prepare a pension spreadsheet that summarizes relevant pension data for 20X6. The following facts relate to 20X6: • Current service cost for accounting was $128,000. • A plan amendment on 1 January resulted in a past service cost of $56,000 being granted. • Total funding of the pension plan was $134,000, on 31 December 20X6. • Actual return on fund assets was $10,500. • An actuarial revaluation was done to reflect new information about expected turnover rates in the employee population. This resulted in a $51,000 increase in the defined benefit obligation, as of 31 December 20X6. 20X6 Opening CSC Net interest PSC (new) Actuarial gains/losses Revaluation Funding Pension Obligation Answer is complete but not entirely correct. Plan Assets Net Pension Expense Pension Asset/Liab. Accumulated OCI $ 461,000 ( $ 107,500 $ 0 $ 353,500 $ 128,000 23,050 x 128,000 0 5,375 17,675 × 56,000 0 0 ☑ 0 0 0 5,125 51,000 0 56,000 × 0 5,125 5,125 51,000 51,000 0 0 $ 201,675 x 201,675 x 0 134,000 134,000 $ 719,050 $ 252,000 $ 467,050 $ 45,875
Gurung Co. has a noncontributory, defined benefit pension plan adopted on 1 January 20X5. On 31 December 20X5, the following information is available: For accounting purposes Interest rate used for pension amounts, 5%. Past service cost, granted as of 1 January 20X5, $360,000. This is also the defined benefit obligation on 1 January. Current service cost for 20X5, appropriately measured for accounting purposes, $83,000. For funding purposes Funding was $107,500 in 20X5 for all pension amounts. The payment was made on 31 December. Actual earnings on fund assets, zero. Required: 1. Prepare a pension spreadsheet that summarizes relevant pension data for 20X5. Answer is complete and correct. Pension Obligation Plan Assets Pension Expense Net Pension Asset/Liab. Accumulated OCI 20X5 Beginning - PSC $ 360,000 $ 0 $ 360,000 $ 0 $ 0 CSC 83,000 0 83,000 0 0 Interest 18,000 0 18,000 0 0 0 $ 461,000 461,000 0 Funding 107,500 107,500 0 $ 461,000 $ 107,500 $ 353,500 0 2. Prepare a pension spreadsheet that summarizes relevant pension data for 20X6. The following facts relate to 20X6: • Current service cost for accounting was $128,000. • A plan amendment on 1 January resulted in a past service cost of $56,000 being granted. • Total funding of the pension plan was $134,000, on 31 December 20X6. • Actual return on fund assets was $10,500. • An actuarial revaluation was done to reflect new information about expected turnover rates in the employee population. This resulted in a $51,000 increase in the defined benefit obligation, as of 31 December 20X6. 20X6 Opening CSC Net interest PSC (new) Actuarial gains/losses Revaluation Funding Pension Obligation Answer is complete but not entirely correct. Plan Assets Net Pension Expense Pension Asset/Liab. Accumulated OCI $ 461,000 ( $ 107,500 $ 0 $ 353,500 $ 128,000 23,050 x 128,000 0 5,375 17,675 × 56,000 0 0 ☑ 0 0 0 5,125 51,000 0 56,000 × 0 5,125 5,125 51,000 51,000 0 0 $ 201,675 x 201,675 x 0 134,000 134,000 $ 719,050 $ 252,000 $ 467,050 $ 45,875
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please fix the ones with red cross marks. Fill the tables.
Transcribed Image Text:Gurung Co. has a noncontributory, defined benefit pension plan adopted on 1 January 20X5. On 31 December 20X5, the following
information is available:
For accounting purposes
Interest rate used for pension amounts, 5%.
Past service cost, granted as of 1 January 20X5, $360,000. This is also the defined benefit obligation on 1 January.
Current service cost for 20X5, appropriately measured for accounting purposes, $83,000.
For funding purposes
Funding was $107,500 in 20X5 for all pension amounts. The payment was made on 31 December.
Actual earnings on fund assets, zero.
Required:
1. Prepare a pension spreadsheet that summarizes relevant pension data for 20X5.
Answer is complete and correct.
Pension
Obligation
Plan
Assets
Pension
Expense
Net
Pension
Asset/Liab.
Accumulated
OCI
20X5
Beginning - PSC $ 360,000
$
0 $ 360,000
$
0
$
0
CSC
83,000
0
83,000
0
0
Interest
18,000
0
18,000
0
0
0
$ 461,000
461,000
0
Funding
107,500
107,500
0
$ 461,000 $
107,500
$
353,500
0
Transcribed Image Text:2. Prepare a pension spreadsheet that summarizes relevant pension data for 20X6. The following facts relate to 20X6:
• Current service cost for accounting was $128,000.
• A plan amendment on 1 January resulted in a past service cost of $56,000 being granted.
• Total funding of the pension plan was $134,000, on 31 December 20X6.
• Actual return on fund assets was $10,500.
• An actuarial revaluation was done to reflect new information about expected turnover rates in the employee population. This
resulted in a $51,000 increase in the defined benefit obligation, as of 31 December 20X6.
20X6
Opening
CSC
Net interest
PSC (new)
Actuarial gains/losses
Revaluation
Funding
Pension
Obligation
Answer is complete but not entirely correct.
Plan
Assets
Net
Pension
Expense
Pension
Asset/Liab.
Accumulated
OCI
$ 461,000 (
$ 107,500
$
0
$ 353,500
$
128,000
23,050 x
128,000
0
5,375
17,675 ×
56,000
0
0 ☑
0
0
0
5,125
51,000
0
56,000 ×
0
5,125
5,125
51,000
51,000
0
0
$ 201,675 x
201,675 x
0
134,000
134,000
$ 719,050 $ 252,000
$ 467,050 $
45,875
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 1 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education