Sarasota 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 $151,990 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $893,900, an accumulated benefit obligation of $794,800, and a debit balance of $403,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $603,500 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 10%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $49,800 in 2020. Amortization of net gain or loss was not required in 2020. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. Components of Pension Expense select a component of Pension Expense Actual Return on Plan Assets Amortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense $enter a dollar amount select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense enter a dollar amount select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense enter a dollar amount select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense enter a dollar amount select a component of Pension Expense Actual Return on Plan Assets Amortization of Prior Service Cost Benefits Paid Contributions to Plan Expected Return on Plan Assets Interest on Projected Benefit Obligation Service Cost Pension Expense $enter a total amount

Sarasota 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 $151,990 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $893,900, an accumulated benefit obligation of $794,800, and a debit balance of $403,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $603,500 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 10%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $49,800 in 2020. Amortization of net gain or loss was not required in 2020. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. Components of Pension Expense select a component of Pension Expense Actual Return on Plan Assets Amortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense $enter a dollar amount select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense enter a dollar amount select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense enter a dollar amount select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense enter a dollar amount select a component of Pension Expense Actual Return on Plan Assets Amortization of Prior Service Cost Benefits Paid Contributions to Plan Expected Return on Plan Assets Interest on Projected Benefit Obligation Service Cost Pension Expense $enter a total amount

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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Exercise 20-11

Sarasota 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 $151,990 for 2020.
3.		As of January 1, 2020, the company had a projected benefit obligation of $893,900, an accumulated benefit obligation of $794,800, and a debit balance of $403,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $603,500 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 10%. No gains or losses occurred in 2020 and no benefits were paid.
4.		Amortization of prior service cost was $49,800 in 2020. Amortization of net gain or loss was not required in 2020.

Determine the amounts of the components of pension expense that should be recognized by the company in 2020.

Components of Pension Expense
select a component of Pension Expense Actual Return on Plan Assets Amortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense		$enter a dollar amount
select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense		enter a dollar amount
select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense		enter a dollar amount
select a component of Pension Expense Actual Return on Plan AssetsAmortization of Prior Service CostBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest on Projected Benefit ObligationService CostPension Expense		enter a dollar amount
select a component of Pension Expense Actual Return on Plan Assets Amortization of Prior Service Cost Benefits Paid Contributions to Plan Expected Return on Plan Assets Interest on Projected Benefit Obligation Service Cost Pension Expense		$enter a total amount

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