Latoya Company provides the following selected information related to its defined benefit pension plan for 2020. Pension asset/liability (January 1) $ 25,000 Cr. Accumulated benefit obligation (December 31) 400,000 Actual and expected return on plan assets 10,000 Contributions (funding) in 2020 150,000 Fair value of plan assets (December 31) 800,000 Settlement rate 10% Projected benefit obligation (January 1) 700,000 Service cost 80,000 Instructions Compute pension expense and prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $35,000. Indicate the pension-related amounts that would be reported in the company's income statement and balance sheet for 2020.
Latoya Company provides the following selected information related to its defined benefit pension plan for 2020. Pension asset/liability (January 1) $ 25,000 Cr. Accumulated benefit obligation (December 31) 400,000 Actual and expected return on plan assets 10,000 Contributions (funding) in 2020 150,000 Fair value of plan assets (December 31) 800,000 Settlement rate 10% Projected benefit obligation (January 1) 700,000 Service cost 80,000 Instructions Compute pension expense and prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $35,000. Indicate the pension-related amounts that would be reported in the company's income statement and balance sheet for 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Latoya Company provides the following selected information related to its defined benefit pension plan for 2020.
| Pension asset/liability (January 1) | $ 25,000 Cr. | |
| Accumulated benefit obligation (December 31) | 400,000 | |
| Actual and expected return on plan assets | 10,000 | |
| Contributions (funding) in 2020 | 150,000 | |
| Fair value of plan assets (December 31) | 800,000 | |
| Settlement rate | 10% | |
| Projected benefit obligation (January 1) | 700,000 | |
| Service cost | 80,000 |
Instructions
- Compute pension expense and prepare the
journal entry to record pension expense and the employer's contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $35,000. - Indicate the pension-related amounts that would be reported in the company's income statement and
balance sheet for 2020.
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