Oriole Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2020 are as follows. Employee Future Years of Service Jim Paul Nancy Dave Kathy Year 2020 On January 1, 2020, the company amended its pension plan, increasing its projected benefit obligation by $73,440. Compute the amount of prior service cost amortization for the years 2020 through 2025 using the years-of-service method, setting up appropriate schedules. 2021 2022 2023 2024 4 2025 5 6 Annual Amortization

Oriole Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2020 are as follows. Employee Future Years of Service Jim Paul Nancy Dave Kathy Year 2020 On January 1, 2020, the company amended its pension plan, increasing its projected benefit obligation by $73,440. Compute the amount of prior service cost amortization for the years 2020 through 2025 using the years-of-service method, setting up appropriate schedules. 2021 2022 2023 2024 4 2025 5 6 Annual Amortization

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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Herring Wholesale Company has a defined benefit pension plan. On January 1, 2024, the following pension related data were available: Net gain-AOCI Accumulated benefit obligation Projected benefit obligation Fair value of plan assets Average remaining service period of active employees (expected to remain constant for the next several years) 1. Amount amortized to 2024 pension expense 2. Pension expense 3. Net gain ($ in thousands) $ 349 3,070 3,100 2,600 The rate of return on plan assets during 2024 was 9%, although it was expected to be 10%. The actuary revised assumptions regarding the PBO at the end of the year, resulting in a $42,000 decrease in the estimate of that obligation. Required: 1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2024. 2. Assume the net pension expense for 2024, not including the amortization of the net gain component, is $344,000. What is pension expense for the year? 3. Determine the net…
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The following information relates to John and Margie Company limited. The company adopts a pension plan on January 1, 2019. No retroactive benefits are granted to employees. The service cost each year is as follows: 2019, Ksh 400,000; 2020, Ksh 420,000; and 2021, Ksh 432,000. The projected benefit obligation at the beginning of each year is as follows: 2020, Ksh 400,000; and 2021, Ksh 840,000. The discount rate is 10% The expected long-term rate of return on plan assets is 10%, which is equal to the actual rate of return. The Company adopts a policy of funding an amount equal to the pension expense and makes the payment to the funding agency at the end of each year. Plan assets are based on the amounts contributed each year, plus a return of 10% per year, less an assumed payment of Ksh, 20,000 at the end of each year to retired employees (beginning in 2020). Required: Calculate the pension expense for the three years and prepare the journal entries for each year to be used to post…
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