Presented below is information related to the pension plan of Zimmer Inc. er the year 2018. The service cost related to pension expense is $260,000 using the rojected benefits approach. The projected benefit obligation and the accumulated benefit obligation at e beginning of the year are $350,000 and $280,000, respectively. The
Presented below is information related to the pension plan of Zimmer Inc. er the year 2018. The service cost related to pension expense is $260,000 using the rojected benefits approach. The projected benefit obligation and the accumulated benefit obligation at e beginning of the year are $350,000 and $280,000, respectively. The
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
i
Transcribed Image Text:3. Presented below is information related to the pension plan of Zimmer Inc.
for the year 2018.
1. The service cost related to pension expense is $260,000 using the
projected benefits approach.
2. The projected benefit obligation and the accumulated benefit obligation at
the beginning of the year are $350,000 and $280,000, respectively. The
expected return on plan assets is 9% and the settlement rate is 10%.
3. The accumulated OCI – prior service cost at the beginning of the year is
$140,000. The company has a workforce of 200 employees, all who are
expected to receive benefits under the plan. The total number of service-
years is 1,000 and the service-years attributable to 2018 is 200. The company
has decided to use the years-of-service method of amortization for these
costs.
At the beginning of the period, the fair value of pension plan assets was
$280,000. The company had an Accumulated OCI (loss) at the beginning of
the period of $90,000. Any amortization of unrecognized net loss is
recognized on a straight-line basis over the average remaining service-life of
the employees.
5. The contribution made to the pension fund in 2018 was $229,000.
Instructions
(a) Determine the pension expense to be reported on the income statement
for 2018. (Round all computations to nearest dollar.)
(b) Prepare the journal entry(ies) to record pension expense for 2018.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education