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 ### Preparing Journal Entries for Pension ExpenseTo 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.

The amount charged to expenditure by a company in connection to its obligations for employee…

Answered: Skysong Inc. sponsors a defined benefit…

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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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.

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