Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (a) Your Answer Correct Answer Correct answer icon Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense select a component of Pension Expense $enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense $enter a total amount eTextbook and Media Solution List of Accounts Attempts: 3 of 3 used (b) Correct answer icon Your answer is correct. Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (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 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount eTextbook and Media List of Accounts Attempts: 1 of 3 used (c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Swifty Company for the year 2020. Swifty Company Income Statement (Partial) choose the accounting period select an income statement item select an income statement item $enter a dollar amount Swifty Company Comprehensive Income Statement choose the accounting period select a comprehensive income item $XXXX select an opening section name select a comprehensive income item enter a dollar amount select a closing name for this statement $XXXX Swifty Company Balance Sheet (Partial) choose the accounting period select an opening name for section one select a balance sheet item $enter a dollar amount select an opening name for section two select a balance sheet item $enter a dollar amount

Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (a) Your Answer Correct Answer Correct answer icon Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense select a component of Pension Expense $enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense $enter a total amount eTextbook and Media Solution List of Accounts Attempts: 3 of 3 used (b) Correct answer icon Your answer is correct. Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (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 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount eTextbook and Media List of Accounts Attempts: 1 of 3 used (c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Swifty Company for the year 2020. Swifty Company Income Statement (Partial) choose the accounting period select an income statement item select an income statement item $enter a dollar amount Swifty Company Comprehensive Income Statement choose the accounting period select a comprehensive income item $XXXX select an opening section name select a comprehensive income item enter a dollar amount select a closing name for this statement $XXXX Swifty Company Balance Sheet (Partial) choose the accounting period select an opening name for section one select a balance sheet item $enter a dollar amount select an opening name for section two select a balance sheet item $enter a dollar amount

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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(a)

Your Answer
Correct Answer

Correct answer icon

Your answer is correct.

Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

Components of Pension Expense
select a component of Pension Expense		$enter a dollar amount
select a component of Pension Expense		enter a dollar amount
select a component of Pension Expense		enter a dollar amount
select a component of Pension Expense		enter a dollar amount
select a component of Pension Expense		$enter a total amount

eTextbook and Media

Solution

List of Accounts

Attempts: 3 of 3 used

(b)

Correct answer icon

Your answer is correct.

Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (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 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

Attempts: 1 of 3 used

(c)

Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Swifty Company for the year 2020.

Swifty Company Income Statement (Partial) choose the accounting period
select an income statement item
select an income statement item		$enter a dollar amount

Swifty Company Comprehensive Income Statement choose the accounting period
select a comprehensive income item		$XXXX
select an opening section name
select a comprehensive income item		enter a dollar amount
select a closing name for this statement		$XXXX

Swifty Company Balance Sheet (Partial) choose the accounting period
select an opening name for section one
select a balance sheet item			$enter a dollar amount
select an opening name for section two
select a balance sheet item			$enter a dollar amount

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1.		The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500.
2.		The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020.
3.		As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid.
4.		Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020.