Klondike Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years2019 and 2020.20192020Projected benefit obligation, January 1Plan assets (fair value and market-related value), January 1Pension asset/liability, January 1Prior service cost, January 1Service costS600,000410,000190,000 Cr.160,00040,000$ 59,000Settlement rate10%10%Expected rate of returnActual return on plan assets10%10%36,00061,000Amortization of prior service cost70,00050,000Annual contributions97,00081,000Benefits paid retirees31,50054,00087,000721,800Increase in projected benefit obligation due to changes in actuarial assumptionsAccumulated benefit obligation at December 31Average service life of all employeesVested benefit obligation at December 31-0-789,00020 years464,000Instructions(a)For both years 2019 and 2020, compute the annual pension expense.

The pension worksheet is used to calculate pension expense and its related journal entries.

Klondike Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2019 and 2020. 2019 2020 Projected benefit obligation, January 1 Plan assets (fair value and market-related value), January 1 Pension asset/liability, January 1 Prior service cost, January 1 S600,000 410,000 190,000 Cr. 160,000 Service cost 40,000 $ 59,000 Settlement rate 10% 10% Expected rate of return Actual return on plan assets Amortization of prior service cost 10% 10% 36,000 61,000 70,000 50,000 Annual contributions 97,000 81,000 Benefits paid retirees Increase in projected benefit obligation due to changes in actuarial assumptions Accumulated benefit obligation at December 31 Average service life of all employees Vested benefit obligation at December 31 31,500 54,000 87,000 -0- 721,800 789,000 20 years 464,000 Instructions (a) For both years 2019 and 2020, compute the annual pension expense.

Klondike Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2019 and 2020. 2019 2020 Projected benefit obligation, January 1 Plan assets (fair value and market-related value), January 1 Pension asset/liability, January 1 Prior service cost, January 1 S600,000 410,000 190,000 Cr. 160,000 Service cost 40,000 $ 59,000 Settlement rate 10% 10% Expected rate of return Actual return on plan assets Amortization of prior service cost 10% 10% 36,000 61,000 70,000 50,000 Annual contributions 97,000 81,000 Benefits paid retirees Increase in projected benefit obligation due to changes in actuarial assumptions Accumulated benefit obligation at December 31 Average service life of all employees Vested benefit obligation at December 31 31,500 54,000 87,000 -0- 721,800 789,000 20 years 464,000 Instructions (a) For both years 2019 and 2020, compute the annual pension expense.

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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