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Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2025. Projected benefit obligation Market-related and fair value of plan assets Accumulated benefit obligation Accumulated OCI (G/L)-Net gain January 1, 2025 $1,498,000 784,000 1,572,000 0 December 31, 2025 $1,526,000 1,116,400 1,691,700 (199,800) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $119,700. The company's actual funding (contributions) of the plan in 2025 amounted to $254,000. 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 $1,197,000 on January 1, 2025. Assume no benefits paid in 2025.

Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2025. Projected benefit obligation Market-related and fair value of plan assets Accumulated benefit obligation Accumulated OCI (G/L)-Net gain January 1, 2025 $1,498,000 784,000 1,572,000 0 December 31, 2025 $1,526,000 1,116,400 1,691,700 (199,800) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $119,700. The company's actual funding (contributions) of the plan in 2025 amounted to $254,000. 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 $1,197,000 on January 1, 2025. Assume no benefits paid in 2025.

FINANCIAL ACCOUNTING
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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Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2025. Projected benefit obligation Market-related and fair value of plan assets Accumulated benefit obligation Accumulated OCI (G/L)-Net gain January 1, 2025 $1,498,000 784,000 1,572,000 0 December 31, 2025 $1,526,000 1,116,400 1,691,700 (199,800) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $119,700. The company's actual funding (contributions) of the plan in 2025 amounted to $254,000. 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 $1,197,000 on January 1, 2025. Assume no benefits paid in 2025.
Transcribed Image Text:Sheridan Company received the following selected information from its pension plan trustee concerning the operation of the company's defined benefit pension plan for the year ended December 31, 2025. Projected benefit obligation Market-related and fair value of plan assets Accumulated benefit obligation Accumulated OCI (G/L)-Net gain January 1, 2025 $1,498,000 784,000 1,572,000 0 December 31, 2025 $1,526,000 1,116,400 1,691,700 (199,800) The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $119,700. The company's actual funding (contributions) of the plan in 2025 amounted to $254,000. 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 $1,197,000 on January 1, 2025. Assume no benefits paid in 2025.
(a) Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2025. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) (b) Service Cost Components of Pension Expense Interest on Projected Benefit Obligation ✓ Expected Return on Plan Assets Amortization of Prior Service Cost Pension Expense Show Transcribed Text $ Account Titles and Explanation 78,000 149,800 ($78,400) $119,700 $269,100 C Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2025. (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 O for the amounts. List all debit entries before credit entries.) Debit Credit
Transcribed Image Text:(a) Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2025. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) (b) Service Cost Components of Pension Expense Interest on Projected Benefit Obligation ✓ Expected Return on Plan Assets Amortization of Prior Service Cost Pension Expense Show Transcribed Text $ Account Titles and Explanation 78,000 149,800 ($78,400) $119,700 $269,100 C Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2025. (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 O for the amounts. List all debit entries before credit entries.) Debit Credit
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