Recording Pension Expense, Plan Funding, Benefit Payments LetsGo Inc. sponsors a defined benefit plan and determined that for the current year of 2020, service cost was $250,000, amortization of prior service cost was $1,800, interest cost was $21,100, and the expected (and actual) return on plan assets was $18,000. LetsGo will contribute $45,000 to the plan for 2020 and payments to retirees totaled $15,000 in 2020. Record the journal entries for pension expense, to Fund the plan, and to pay benefits for 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2020 To record pension expense Dec. 31, 2020 To record plan funding Dec. 31, 2020 To record benefit payments

Recording Pension Expense, Plan Funding, Benefit Payments LetsGo Inc. sponsors a defined benefit plan and determined that for the current year of 2020, service cost was $250,000, amortization of prior service cost was $1,800, interest cost was $21,100, and the expected (and actual) return on plan assets was $18,000. LetsGo will contribute $45,000 to the plan for 2020 and payments to retirees totaled $15,000 in 2020. Record the journal entries for pension expense, to Fund the plan, and to pay benefits for 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2020 To record pension expense Dec. 31, 2020 To record plan funding Dec. 31, 2020 To record benefit payments

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Pharoah Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2024, with the following beginning balances: plan assets $202,100; projected benefit obligation $247,000. Other data relating to 3 years' operation of the plan are as follows. Annual service cost Settlement rate and expected rate of return Actual return on plan assets Annual funding (contributions) Benefits paid Prior service cost (plan amended, 1/1/25) Amortization of prior service cost Change in actuarial assumptions establishes a December 31, 2026, projected benefit obligation of: (a) (b) Date Dec. 31, 2024 Dec. 31, 2025 Dec. 31, 2026 V Account Titles and Explanation Pension Expense Other Comprehensive Income (G/L) Cash Pension Asset/Liability Pension Expense Other Comprehensive Income (PSC) Cash Pension Asset/Liability Pension Asset/Liability Other Comprehensive Income (G/L) Other Comprehensive Income (PSC) 2024 $16,100 Prepare the journal entries (from the worksheet) to reflect all…
Wildhorse Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $817,830 $993,330 Projected benefit obligation, January 1 819,000 936,000 Pension asset/liability, January 1 163,800 Cr. ? Prior service cost, January 1 292,500 280,800 Service cost 70,200 105,300 Actual and expected return on plan assets 28,080 35,100 Amortization of prior service cost 11,700 14,040 Contributions (funding) 134,550 140,400 Accumulated benefit obligation, December 31 585,000 643,500 Interest/settlement rate 10 % 10 % Prepare the journal entries to record the pension expense and the company’s funding of the pension plan for both years.
age Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $198,200; projected benefit obligation $251,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021 Annual service cost $16,300 $19,100 $26,400 Settlement rate and expected rate of return 10 % 10 % 10 % Actual return on plan assets 18,400 21,870 24,000 Annual funding (contributions) 16,300 39,200 47,700 Benefits paid 14,200 16,100 21,400 Prior service cost (plan amended, 1/1/20) 161,700 Amortization of prior service cost 54,100 41,700 Change in actuarial assumptions establishesa December 31, 2021, projected benefit obligation of: 524,600 a. How to prepare a pension worksheet presenting all 3 years’ pension balances and activities.
On January 1, 2022, Seascape Ltd. reported the following balances relating to their defined benefit pension plan. Seascape Ltd. uses ASPE. Defined benefit obligation $ 2,100,000 Fair value of plan assets. 1,900,000 Other data related to the pension plan for 2022 are: Current service cost 110,000 Contributions to the plan 105,000 Benefits paid.. 180,000 Actual return on plan assets. 142,000 Interest (discount) rate 7% Past service costs, Jan 1 120,000 Actuary adjustment, Dec 31 220,000 Pension Asset/Liability account on Balance Sheet Instructions a) Calculate the defined benefit obligation at December 31, 2022. b) Calculate the fair value of plan assets at December 31, 2022. c) Calculate pension expense for 2022. d) Prepare the journal entries to record the pension expense and the contributions for 2022. e) How would your answer be different if the company used IFRS? f) What is the funded status of the plan on December 31, 2022? Indicate whether it is underfunded or overfunded.
Preparing a Pension Worksheet Levine Co. sponsored a defined benefit plan, which included January 1, 2020, balances of $3,000 and $2,880 in Plan Assets and Projected Benefit Obligation, respectively. During 2020, the company incurred $600 in service cost, made plan contributions of $126, and paid benefits to retirees for $90. The discount rate is 9% and the expected and actual rate of return on plan assets is 10%. Prepare a pension worksheet for 2020.Note: Use a negative sign for credits to accounts. Pension Worksheet Reported Net in Financial Statements Balance Sheet Income Statement PlanAssets PBO Net PensionAsset/Liability CashOutflow PensionExpense Balance, January 1, 2020 Service cost Interest cost Expected return Contributions to fund Benefit payments Balance, December 31, 2020
Sunland Inc. provides the following information related to its post-retirement health-care benefits for the year 2020: Defined post–retirement benefit obligation at January 1, 2020 $114,000 Plan assets, January 1, 2020 45,800 Actual return on plan assets, 2020 4,000 Discount rate 11% Service cost, 2020 56,200 Plan funding during 2020 22,200 Payments from plan to retirees during 2020 6,200 Actuarial loss on defined post-retirement benefit obligation, 2020 (end of year) 26,300 Sunland Inc. follows IFRS. Calculate the post–retirement benefit expense for 2020. Post–retirement benefit expense 2020 $enter the Post–retirement benefit expense in dollars eTextbook and Media Calculate the post-retirement benefit remeasurement gain or loss—other comprehensive income (OCI) for 2020. Post-retirement benefit remeasurement select an option…
Pharoah Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $199,200; projected benefit obligation $248,000. Other data relating to 3 years' operation of the plan are as follows. Annual service cost Settlement rate and expected rate of return Actual return on plan assets Annual funding (contributions) Benefits paid Prior service cost (plan amended, 1/1/20) Amortization of prior service cost Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 2019 $16,200 10 % 18,200 16,200 13,700 2020 $19,000 10 % 21,990 40,200 16,100 161,100 54,000 2021 $26,200 10 % 23,900 48,300 20,700 42,300 511,800
The following defined pension data of Waterway Corp. apply to the year 2020. Projected benefit obligation, 1/1/20 (before amendment) $509,000 Plan assets, 1/1/20 496,000 Pension liability 13,000 On January 1, 2020, Waterway Corp., through plan amendment, grants prior service benefits having a present value of 123,000 Settlement rate 9 % Service cost 58,300 Contributions (funding) 59,600 Actual (expected) return on plan assets 48,300 Benefits paid to retirees 43,500 Prior service cost amortization for 2020 16,400 For 2020, prepare a pension worksheet for Waterway Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts. (Enter all amounts as positive.) WATERWAY CORP.Pension Worksheet—2020 General Journal Entries Memo Record Items Annual PensionExpense Cash OCI–Prior
Sarasota Importers provides the following pension plan information. Fair value of pension plan assets, January 1, 2020 $2,219,000 Fair value of pension plan assets, December 31, 2020 2,547,000 Contributions to the plan in 2020 287,000 Benefits paid retirees in 2020 361,000 From the data above, compute the actual return on the plan assets for 2020. Actual return on plan assets for 2020
Calculating Pension Expense Stars Inc. has a noncontributory defined pension plan for its employees. During 2020, the company had service cost of $90,000, an expected return on plan assets of $13,920, amortization of prior service cost of $3,000, amortization of net pension loss of $3,333, and benefits paid to employees of $60,000. The January 1, 2020, balance in its projected benefit obligation was $291,000. The discount rate is 10%. Required Calculate pension expense for 2020. $Answer
The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $3,350. b. Prior service cost from plan amendment on January 2, 2024 = $650 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $650. d. Service cost for 2025 = $700. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10%. f. Payments to retirees in 2024 $510. g. Payments to retirees in 2025 $580. h. No changes in actuarial assumptions or estimates. 1. Net gain-AOCI on January 1, 2024 = $375. J. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $2,400. b. 2024 contributions $670. c. 2025 contributions $720. d. Expected long-term rate…
Presented below is information related to Mikell Department Stores, Inc. pension plan for 2022. Service cost 375,000 Funding contribution for 2022 300,000 Settlement rate used in actuarial computation 8% Expected and actual return on plan assets 7% Amortization of Prior Service Costs 70,000 Amortization of net gains 35,000 Projected benefit obligation (at beginning of year) 420,000 Market-related (and fair) value of plan assets (at beginning of year) 380,000 No benefits were paid during 2022. Required: (a) Compute the amount of pension expense to be reported for 2022. (b) Prepare the journal entry to record pension expense for 2022.