Splish Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $733,950 $891,450 Projected benefit obligation, January 1 735,000 840,000 Pension asset/liability, January 1 147,000 Cr. Prior service cost, January 1 262,500 252,000 Service cost 63,000 94,500 Actual and expected return on plan assets 25,200 31,500 Amortization of prior service cost 10,500 12,600 Contributions (funding) 120,750 126,000 Accumulated benefit obligation, December 31 525,000 577,500 Interest/settlement rate 10 % 10 %

Splish Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $733,950 $891,450 Projected benefit obligation, January 1 735,000 840,000 Pension asset/liability, January 1 147,000 Cr. Prior service cost, January 1 262,500 252,000 Service cost 63,000 94,500 Actual and expected return on plan assets 25,200 31,500 Amortization of prior service cost 10,500 12,600 Contributions (funding) 120,750 126,000 Accumulated benefit obligation, December 31 525,000 577,500 Interest/settlement rate 10 % 10 %

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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Sunland Toothpaste Company initiates a defined benefit pension plan for its 50 employees on January 1, 2020. The insurance company which administers the pension plan provided the following selected information for the years 2020, 2021, and 2022. For Year Ended December 31, 2020 2021 2022 Plan assets (fair value) $50,000 $85,000 $180,200 Accumulated benefit obligation 44,700 165,300 289,100 Projected benefit obligation 60,000 200,400 326,100 Net (gain) loss (for purposes of corridor calculation) 78,800 83,971 Employer's funding contribution (made at end of year) 50,000 60,000 105,100 There were no balances as of January 1, 2020, when the plan was initiated. The actual and expected return on plan assets was 10% over the 3-year period, but the settlement rate used to discount the company's pension obligation was 13% in 2020, 11% in 2021, and 8% in 2022. The service cost component of net periodic pension expense amounted to the following: 2020, $60,000; 2021, $85,000; and 2022, $118,000.…
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Electronic Distribution has a defined benefit pension plan. Characteristics of the plan during 2024 are as follows: ($ millions) $470 300 PBO balance, January 1 Plan assets balance, January 1 Service cost Interest cost Gain from change in actuarial assumption Benefits paid Actual return on plan assets Contributions 2024 The expected long-term rate of return on plan assets was 6%. There were no AOCI balances related to pensions on January 1, 2024, but at the end of 2024, the company amended the pension formula, creating a prior service cost of $12 million. Required: 1. Calculate the pension expense for 2024. 2. Prepare the journal entries to record (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of benefits for 2024. 3. What amount will Electronic Distribution report in its 2024 balance sheet as a net pension asset or net pension liability? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3…
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