The following data relate to the operation of Kramer Co.'s pension plan in 2021. The pension worksheet for 2020 is provided in P20.10. Service cost $59,000 Actual return on plan assets 32,000 Amortization of prior service cost 28,000 Annual contributions 51,000 Benefits paid retirees 27,000 Average service life of all employees 25 years For 2021, Kramer will use the same assumptions as 2020 for the expected rate of returns on plan assets. The settlement rate for 2021 is 10%. Instructions Prepare a pension worksheet for 2021 and accompanying computations and amortization of the loss, if any, in 2021 using the corridor approach. Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31. Indicate the pension amounts reported in the financial statements.
The following data relate to the operation of Kramer Co.'s pension plan in 2021. The pension worksheet for 2020 is provided in P20.10. Service cost $59,000 Actual return on plan assets 32,000 Amortization of prior service cost 28,000 Annual contributions 51,000 Benefits paid retirees 27,000 Average service life of all employees 25 years For 2021, Kramer will use the same assumptions as 2020 for the expected rate of returns on plan assets. The settlement rate for 2021 is 10%. Instructions Prepare a pension worksheet for 2021 and accompanying computations and amortization of the loss, if any, in 2021 using the corridor approach. Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31. Indicate the pension amounts reported in the financial statements.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following data relate to the operation of Kramer Co.'s pension plan in 2021. The pension worksheet for 2020 is provided in P20.10.
| Service cost | $59,000 | |
| Actual return on plan assets | 32,000 | |
| Amortization of prior service cost | 28,000 | |
| Annual contributions | 51,000 | |
| Benefits paid retirees | 27,000 | |
| Average service life of all employees | 25 years |
For 2021, Kramer will use the same assumptions as 2020 for the expected
Instructions
- Prepare a pension worksheet for 2021 and accompanying computations and amortization of the loss, if any, in 2021 using the corridor approach.
- Prepare the
journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31. - Indicate the pension amounts reported in the financial statements.
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