On January 1, 2020, Flounder Company has the following defined benefit pension plan balances. Projected benefit obligation $4,492,000 Fair value of plan assets 4,270,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $491,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $150,000 $177,000 Prior service cost amortization 0 90,000 Contributions (funding) to the plan 237,000 286,000 Benefits paid 196,000 284,000 Actual return on plan assets 256,200 262,000 Expected rate of return on assets 6 % 8 % (a) Prepare a pension worksheet for the pension plan for 2020 and 2021. (Enter all amounts as positive.) General Journal entries Memo entries Items Annual Pension Expense Cash OCI-Prior Service Cost OCI-Gain/Loss Pension Asset/Liability Projected Benefit Obligation Plan Assets Balance 1/1/20 Service cost Interest cost Actual return Contributions Benefits Journal entry for 2020 Acc OCI 12/31/2019 Bal 12/31/20 Add’l PSC 1/1/21 Bal 1/1/21 Service cost Interest cost Actual return Unexpected loss Amortization of PSC Contributions Benefits Journal entry for 2021 Accumulated OCI12/31/20 Bal 12/31/21. For 2021, prepare the journal entry to record pension-related amounts. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
On January 1, 2020, Flounder Company has the following defined benefit pension plan balances.
|
Projected benefit obligation |
$4,492,000 |
|
|
Fair value of plan assets |
4,270,000 |
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $491,000 are created. Other data related to the pension plan are as follows.
|
2020 |
2021 |
|||||
|
Service cost |
$150,000 |
$177,000 |
||||
|
Prior service cost amortization |
0 |
90,000 |
||||
|
Contributions (funding) to the plan |
237,000 |
286,000 |
||||
|
Benefits paid |
196,000 |
284,000 |
||||
|
Actual return on plan assets |
256,200 |
262,000 |
||||
|
Expected |
6 |
% |
8 |
% |
(a)
Prepare a pension worksheet for the pension plan for 2020 and 2021. (Enter all amounts as positive.)
General Journal entries Memo entries
Items Annual Pension Expense Cash OCI-Prior Service Cost OCI-Gain/Loss Pension Asset/Liability Projected Benefit Obligation Plan Assets
Balance 1/1/20
Service cost
Interest cost
Actual return
Contributions
Benefits
Acc OCI 12/31/2019
Bal 12/31/20
Add’l PSC 1/1/21
Bal 1/1/21
Service cost
Interest cost
Actual return
Unexpected loss
Amortization of PSC
Contributions
Benefits
Journal entry for 2021
Accumulated OCI12/31/20
Bal 12/31/21.
For 2021, prepare the journal entry to record pension-related amounts. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
