On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances. Projected benefit obligation Fair value of plan assets $4,420,000 4,210,000 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 $506,000 are created. Other data related to the pension plan are as follows. Service cost Prior service cost amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 2020 $151,000 0 239,000 198,000 252,600 6% 2021 $176,000 92,000 289,000 275,000 257,000 8%
On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances. Projected benefit obligation Fair value of plan assets $4,420,000 4,210,000 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 $506,000 are created. Other data related to the pension plan are as follows. Service cost Prior service cost amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 2020 $151,000 0 239,000 198,000 252,600 6% 2021 $176,000 92,000 289,000 275,000 257,000 8%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ee.63.
Transcribed Image Text:On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances.
Projected benefit obligation
Fair value of plan assets
Service cost
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 $506,000 are created. Other data related to the pension plan are as follows.
Prior service cost amortization
Contributions (funding) to the plan
Benefits paid
Actual return on plan assets
Expected rate of return on assets
Items
Balance, Jan, 1, 2020
Service cost
Interest cost
Actual return
$4,420,000
xt
Contributions
Benefits
4,210,000
Journal entry for 2020
2020
$151,000
0
239,000
198,000
Prepare a pension worksheet for the pension plan for 2020 and 2021. (Enter all amounts as positive.)
252,600
$
6%
2021
$176,000
92,000
289,000
275,000
257,000
Annual Pension
Expense
151.000
442,000
8 %
255,600
337,400
Cr
Cr. Y
$
Cash
1000000
238,000
238,000
UUUU
Cr.
Cr.
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