Jackson Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $200,000; projected benefit obligation $250,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021 Annual service cost $16,000 $19,000 $26,000 Settlement rate and expected rate of return 10 % 10 % 10 % Actual return on plan assets 18,000 22,000 24,000 Annual funding (contributions) 16,000 40,000 48,000 Benefits paid 14,000 16,400 21,000 Prior service cost (plan amended, 1/1/20) 160,000 Amortization of prior service cost 54,400 41,600 Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 520,000 Prepare a pension worksheet presenting all 3 years’ pension balances and activities. (Enter all amounts as positive.) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year Indicate the pension-related amounts reported in the financial statements for 2021.
Jackson Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $200,000; projected benefit obligation $250,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021 Annual service cost $16,000 $19,000 $26,000 Settlement rate and expected rate of return 10 % 10 % 10 % Actual return on plan assets 18,000 22,000 24,000 Annual funding (contributions) 16,000 40,000 48,000 Benefits paid 14,000 16,400 21,000 Prior service cost (plan amended, 1/1/20) 160,000 Amortization of prior service cost 54,400 41,600 Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 520,000 Prepare a pension worksheet presenting all 3 years’ pension balances and activities. (Enter all amounts as positive.) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year Indicate the pension-related amounts reported in the financial statements for 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jackson Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $200,000; projected benefit obligation $250,000. Other data relating to 3 years’ operation of the plan are as follows.
|
2019
|
2020
|
2021
|
|||||||
| Annual service cost | $16,000 | $19,000 | $26,000 | ||||||
| Settlement rate and expected |
10 | % | 10 | % | 10 | % | |||
| Actual return on plan assets | 18,000 | 22,000 | 24,000 | ||||||
| Annual funding (contributions) | 16,000 | 40,000 | 48,000 | ||||||
| Benefits paid | 14,000 | 16,400 | 21,000 | ||||||
| Prior service cost (plan amended, 1/1/20) | 160,000 | ||||||||
| Amortization of prior service cost | 54,400 | 41,600 | |||||||
| Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: |
520,000 |
Prepare a pension worksheet presenting all 3 years’ pension balances and activities. (Enter all amounts as positive.)
Prepare the
Indicate the pension-related amounts reported in the financial statements for 2021.
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