On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,290,000 on that date (which it did not fund). Baznik hassix participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016:EmployeeExpected Years of Future ServiceA1B4DEF6Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the components of Baznik's pension expense, in addition to the amortization of the prior service cost for 2016 and 2017:20162017Service cost$386,800$410,683Interest cost on projected benefit obligation116,800174,737Expected return on plan assets93,000Baznik contributed $799,800 and $759,200 to the pension fund at the end of 2016 and 2017, respectively.Required:1. Next Level Prepare a set of schedules for Baznik to determine (a) the amortization fraction for each year and (b) the amortization of the priorservice cost.2. Next Level Prepare all the journal entries related to Baznik's pension plan for 2016 and 2017.

Journal entry refers to posting of the transaction of the financial nature into the books of the…

Answered: participating employees who are…

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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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…
(Pension Expense, Journal Entries, Statement Presentation) Ferreri Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension planfor the year ended December 31, 2017. Check below image for information. The service cost component of pension expense for employee services rendered in the current year amounted to $77,000 and the amortization of prior service cost was $120,000. The company’s actual funding (contributions) of the plan in 2017 amounted to $250,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,200,000 on January 1, 2017. Assume no benefits paid in 2017.Instructions(a) Determine the amounts of the components of pension expense that should be recognized by the company in 2017.(b) Prepare the journal entry to record pension expense and the employer’s…
wifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (a)…
Carla Vista, Inc. on January 1, 2021 initiated a noncontributory, defined-benefit pension plan that grants benefits to its 109 employees for services rendered in years prior to the adoption of the pension plan. The total expected service-years of the 109 employees who are expected to receive benefits under the plan is 1,308. An actuarial consulting firm has indicated that the present value of the projected benefit obligation on January 1, 2021 was $5,628,000. On December 31, 2021 the following information was provided concerning the pension plan's operations for its first year. Employer's contribution at end of year Service cost Projected benefit obligation Plan assets (at fair value) Expected return on plan assets Settlement rate (a) $1,690,000 Pension expense 690,000 6,606,600 1,690,000 gas 8% Compute the pension expense recognized in 2021. Assume the prior service cost is amortized over the average remaining service life of the employees.
arasota 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 3 Paul 4 Nancy 5 Dave 6 Kathy 6 On January 1, 2020, the company amended its pension plan, increasing its projected benefit obligation by $74,880.Compute the amount of prior service cost amortization for the years 2020 through 2025 using the years-of-service method, setting up appropriate schedules. Year Annual Amortization 2020 $enter a dollar amount 2021 enter a dollar amount 2022 enter a dollar amount 2023 enter a dollar amount 2024 enter a dollar amount 2025 enter a dollar amount
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W13-3 Happy Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2019 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2019 amounted to P56, 000. 2. The company's funding policy requires a contribution to the pension trustee amounting to P145, 000 for 2019. 3. As of January 1, 2019, the company had a projected benefit obligation of P900, 000, an accumulated benefit obligation of P800, 000, and a balance of P400, 000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to P600, 000 at the beginning of the year. The actual and expected return on plan assets was P54, 000. The settlement rate was 9%. No gains or losses occurred in 2019 and no benefits were paid. 4. Amortization of prior service cost was $50,000 in 2012. Amortization of net gain or loss was not required in 2012. Instructions: (a) Determine the…
You have the following information related to Chalmers Corporation's pension plan: Use the PV of 1, PVAD of 1, and PVOA of 1 tables where appropriate. (Use the appropriate factor(s) from the tables provided.) a. Defined benefit, noncontributory pension plan. b. Plan initiation, January 1, 20X3 (no credit given for prior service). c. Retirement benefits paid at year-end with the first payment one year after retirement. d. Assumed discount rate of 7%. e. Assumed expected rate of return on plan assets of 9%. f. Annual retirement benefit equals years of credited service × 0.02 x highest salary. g. Chalmers made $1,200 contributions to the pension fund at the end of each year. h. The actual returns were $0 and $48 in 20X3 and 20X4, respectively. i. Information for Frank Bullitt, the firm's only employee, follows: January 1, 20X0 December 31, 20Y7 (15 years from plan inception) Start date Expected retirement date Expected number of payments during retirement 20 Selected actual and expected…
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(Comprehensive 2-Year Worksheet) Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018. Check the below image for pension plan information. Instructions(a) Prepare a pension worksheet presenting both years 2017 and 2018 and accompanying computations and amortization of the loss (2018) using the corridor approach.(b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.(c) For 2018, indicate the pension amounts reported in the financial statements.

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