Sage Company provides the following selected information related to its defined benefit pension plan for 2020. Pension asset/liability (January 1) $25,600 Cr. Accumulated benefit obligation (December 31) 400,600 Actual and expected return on plan assets 10,400 Contributions (funding) in 2020 148,800 Fair value of plan assets (December 31) 796,000 Settlement rate 10 % Projected benefit obligation (January 1) 698,500 Service cost 79,600 (a) Correct answer icon Your answer is correct. Compute pension expense. Pension expense for 2020 $ Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $36,100. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts Attempts: 1 of 3 used (b) Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2020. Sage Company Income Statement (Partial) $ $ Sage Company Balance Sheet (Partial)

Sage Company provides the following selected information related to its defined benefit pension plan for 2020. Pension asset/liability (January 1) $25,600 Cr. Accumulated benefit obligation (December 31) 400,600 Actual and expected return on plan assets 10,400 Contributions (funding) in 2020 148,800 Fair value of plan assets (December 31) 796,000 Settlement rate 10 % Projected benefit obligation (January 1) 698,500 Service cost 79,600 (a) Correct answer icon Your answer is correct. Compute pension expense. Pension expense for 2020 $ Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $36,100. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit eTextbook and Media List of Accounts Attempts: 1 of 3 used (b) Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2020. Sage Company Income Statement (Partial) $ $ Sage Company Balance Sheet (Partial)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 4E

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(a)

Correct answer icon

Your answer is correct.

Compute pension expense.

Pension expense for 2020

Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $36,100. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit

eTextbook and Media

List of Accounts

Attempts: 1 of 3 used

(b)

Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2020.

Sage Company Income Statement (Partial)

		$

		$

Sage Company Balance Sheet (Partial)

			$

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Pension asset/liability (January 1)	$25,600	Cr.
Accumulated benefit obligation (December 31)	400,600
Actual and expected return on plan assets	10,400
Contributions (funding) in 2020	148,800
Fair value of plan assets (December 31)	796,000
Settlement rate	10	%
Projected benefit obligation (January 1)	698,500
Service cost	79,600