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 180,00
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 180,00
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter14: Activities Required In Completing A Quality Audit
Section: Chapter Questions
Problem 65RSCQ
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Question
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 |
![### Preparing Journal Entries for Pension Expense
To accurately document the pension expense for the year 2020, follow these guidelines for preparing the journal entry. This section provides a structured table for recording the relevant account titles along with the corresponding debit and credit amounts. Keep in mind these crucial details:
- **Automatic Indentation:** Credit account titles will auto-indent as soon as amounts are entered. You do not need to manually indent them.
- **No Entry:** If an account title is irrelevant or amounts are not needed, select “No Entry” and input 0 for the corresponding amounts.
Below is the template you should use:
| Account Titles and Explanation | Debit | Credit |
|--------------------------------|-------|--------|
| | | |
| | | |
| | | |
| | | |
This table will help students and practitioners efficiently organize and record the financial data related to pension expenses, ensuring accuracy and clarity in financial reporting.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb9455e9-1b75-42ab-87bf-b8a6d9f2482d%2F326c0822-de1e-4616-be17-2f8ead72e7d7%2Fqvfb1a_processed.png&w=3840&q=75)
Transcribed Image Text:### Preparing Journal Entries for Pension Expense
To accurately document the pension expense for the year 2020, follow these guidelines for preparing the journal entry. This section provides a structured table for recording the relevant account titles along with the corresponding debit and credit amounts. Keep in mind these crucial details:
- **Automatic Indentation:** Credit account titles will auto-indent as soon as amounts are entered. You do not need to manually indent them.
- **No Entry:** If an account title is irrelevant or amounts are not needed, select “No Entry” and input 0 for the corresponding amounts.
Below is the template you should use:
| Account Titles and Explanation | Debit | Credit |
|--------------------------------|-------|--------|
| | | |
| | | |
| | | |
| | | |
This table will help students and practitioners efficiently organize and record the financial data related to pension expenses, ensuring accuracy and clarity in financial reporting.
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