The following facts apply to the pension plan of Splish Inc. for the year 2020.Plan assets, January 1, 2020 $525,500 Projected benefit obligation, January 1, 2020 525,500 Settlement rate 8% Service cost 36,800 Contributions (funding) 23,800 Actual and expected return on plan assets 49,800 Benefits paid to retirees 30,300 Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts.

Definition: Pension plan: This is the plan devised by corporations to pay the employees an income…

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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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The following facts apply to the pension plan of Splish Inc. for the year 2020.

Plan assets, January 1, 2020		$525,500
Projected benefit obligation, January 1, 2020		525,500
Settlement rate		8%
Service cost		36,800
Contributions (funding)		23,800
Actual and expected return on plan assets		49,800
Benefits paid to retirees		30,300

Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts.

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