Skysong Inc. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.Plan assets $1,710,000Projected benefit obligation 1,995,000Pension liability 285,000Prior service cost 246,000As a result of the operation of the plan during 2020, the following additional data are provided by the actuary.Service cost for 2020 $135,000Settlement rate, 6% Actual return on plan assets in 2020 112,000Amortization of prior service cost 24,000Expected return on plan assets 165,000Unexpected gain from change in projected benefit obligation, due to change in actuarial predictions 215,000Contributions in 2020 148,000Benefits paid retirees in 2020 180,000 ### SWEET CORP#### Pension Worksheet—2020This worksheet is designed to help record and organize pension-related financial transactions for SWEET CORP for the year 2020. Below is a detailed transcribed version covering various items, their accounts, and respective balances.##### Table: Pension Worksheet- **Column Headers:** 1. **Items**: Describes the type of financial elements and activities recorded. 2. **Annual Pension Expense**: Tracks expenses related to the pension for the year. 3. **Cash**: Accounts for cash transactions related to pension. 4. **General Journal Entries** - **OCI—Prior Service Cost**: Prior Service Cost recorded in Other Comprehensive Income. - **OCI—Gain/Loss**: Gains or losses recorded in Other Comprehensive Income. - **Pension Asset/Liability**: Records the net pension asset or liability. 5. **Memoranda** - **Projected Benefit Obligation**: Tracks the projected benefit obligation.- **Row Headers:** - Balance, Jan. 1, 2020 - Service cost - Interest cost - Actual return - Unexpected loss - Amortization of PSC - Amortization of loss - Contributions - Benefits - Journal entry for 2020 - Accumulated OCI, Dec. 31, 2019 - Balance, Dec. 31, 2020**Balance Entries:**Each cell under the columns has a placeholder to enter the dollar amounts (denoted by `$`).**Explanation of Columns:**1. **Annual Pension Expense**: This column captures the expenses SWEET CORP incurs annually for its pension plans.2. **Cash**: This contains entries for all cash-related transactions from and to the pension fund.3. **OCI—Prior Service Cost**: This is used to enter prior service costs adjusted in Other Comprehensive Income.4. **OCI—Gain/Loss**: This column records recognized gains or losses.5. **Pension Asset/Liability**: Captures the net status of pension assets or liabilities.6. **Projected Benefit Obligation**: It is used for tracking the estimated future pension benefits the company is obligated to pay out.**Process:**1. **Balance at the beginning of the year**: Inputs the

Pension Expense: It is the expenses which is paid to employees for their services after…

Answered: Skysong Inc. sponsors a defined benefit…

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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Skysong Inc. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.

Plan assets		$1,710,000
Projected benefit obligation		1,995,000
Pension liability		285,000
Prior service cost		246,000

As a result of the operation of the plan during 2020, the following additional data are provided by the actuary.

Service cost for 2020		$135,000
Settlement rate, 6%
Actual return on plan assets in 2020		112,000
Amortization of prior service cost		24,000
Expected return on plan assets		165,000
Unexpected gain from change in projected benefit obligation, due to change in actuarial predictions		215,000
Contributions in 2020		148,000
Benefits paid retirees in 2020		180,000

### SWEET CORP
#### Pension Worksheet—2020

This worksheet is designed to help record and organize pension-related financial transactions for SWEET CORP for the year 2020. Below is a detailed transcribed version covering various items, their accounts, and respective balances.

##### Table: Pension Worksheet

- **Column Headers:**
1. **Items**: Describes the type of financial elements and activities recorded.
2. **Annual Pension Expense**: Tracks expenses related to the pension for the year.
3. **Cash**: Accounts for cash transactions related to pension.
4. **General Journal Entries**
- **OCI—Prior Service Cost**: Prior Service Cost recorded in Other Comprehensive Income.
- **OCI—Gain/Loss**: Gains or losses recorded in Other Comprehensive Income.
- **Pension Asset/Liability**: Records the net pension asset or liability.
5. **Memoranda**
- **Projected Benefit Obligation**: Tracks the projected benefit obligation.

- **Row Headers:**
- Balance, Jan. 1, 2020
- Service cost
- Interest cost
- Actual return
- Unexpected loss
- Amortization of PSC
- Amortization of loss
- Contributions
- Benefits
- Journal entry for 2020
- Accumulated OCI, Dec. 31, 2019
- Balance, Dec. 31, 2020

**Balance Entries:**
Each cell under the columns has a placeholder to enter the dollar amounts (denoted by `$`).

**Explanation of Columns:**
1. **Annual Pension Expense**: This column captures the expenses SWEET CORP incurs annually for its pension plans.
2. **Cash**: This contains entries for all cash-related transactions from and to the pension fund.
3. **OCI—Prior Service Cost**: This is used to enter prior service costs adjusted in Other Comprehensive Income.
4. **OCI—Gain/Loss**: This column records recognized gains or losses.
5. **Pension Asset/Liability**: Captures the net status of pension assets or liabilities.
6. **Projected Benefit Obligation**: It is used for tracking the estimated future pension benefits the company is obligated to pay out.

**Process:**
1. **Balance at the beginning of the year**: Inputs the

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