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The following information relate to the defined benefit pension plan of Lorentz Corp. as of 1/1/x1 Projected benefit obligation Fair value of plan assets Unrecognized prior service cost Unrecognized net pension gain or (loss) 1,655,000 1,513,500 221,600 (65,000) Pension data for 20x1 and 20x2: 20x1 20x2 Service cost 88,000 99,000 Contributions to pension plan 120,000 125,000 Benefits paid to retirees 132.000 140,000 Actual retum on pension plan assets 26,350 180,000 Amortization of prior service costs 53,000 42,000 Settlement interest rate 11% 11% Expected rate of return on plan assets 10% 10% Accumulated benefit obligation 12/31 1,620,000 Vested benefit obligation 12/31 1,200,000 Average remaining service lives of employees 12 years 1,850,000 1,500,000 14 years 1. Calculate the PBO at 12/31/x1 and 12/31/x2 20x1 20x2 Beginning balance Service cost 1,655,000 88,000 1,803,500 99,000 Interest Benefits paid to retirees Ending balance 2 Calculate the fund balance at 12/31/x1 and 12/31/x2 Beginning balance Contributions to pension plan Actual return on pension plan assets Benefits paid to retirees Ending balance 3. The corridor for amortization of gain or loss is, for 20x1 $ 20x1 20x2 1,513,500 4. Calculate the experience gain or loss, if any for 20x1 and 20x2 20x1 Actual return on plan assets Expected return on plan assets Experience gain (loss) 5. Calculate the amortization of gain or loss, if any for 20x1 and 20x2 Cumulative unamortized gains(losses) Corridor for gain/loss amortization Excess, if any Amortization period Amount of gain/loss to amortize, if any for 20x2 $ 20x2 20x1 20x2 (65,000) +6. Calculate pension expense (sometimes referred to not pension cost) for 20x1 and 20x2 20x1 20x2 Service Cost 87,000 98,000 Interest Return Amortization of PSC Amortization of gain/loss Net Pension Cost 7. Make journal entries to record pension expense for 20x1 and 20x2

The following information relate to the defined benefit pension plan of Lorentz Corp. as of 1/1/x1 Projected benefit obligation Fair value of plan assets Unrecognized prior service cost Unrecognized net pension gain or (loss) 1,655,000 1,513,500 221,600 (65,000) Pension data for 20x1 and 20x2: 20x1 20x2 Service cost 88,000 99,000 Contributions to pension plan 120,000 125,000 Benefits paid to retirees 132.000 140,000 Actual retum on pension plan assets 26,350 180,000 Amortization of prior service costs 53,000 42,000 Settlement interest rate 11% 11% Expected rate of return on plan assets 10% 10% Accumulated benefit obligation 12/31 1,620,000 Vested benefit obligation 12/31 1,200,000 Average remaining service lives of employees 12 years 1,850,000 1,500,000 14 years 1. Calculate the PBO at 12/31/x1 and 12/31/x2 20x1 20x2 Beginning balance Service cost 1,655,000 88,000 1,803,500 99,000 Interest Benefits paid to retirees Ending balance 2 Calculate the fund balance at 12/31/x1 and 12/31/x2 Beginning balance Contributions to pension plan Actual return on pension plan assets Benefits paid to retirees Ending balance 3. The corridor for amortization of gain or loss is, for 20x1 $ 20x1 20x2 1,513,500 4. Calculate the experience gain or loss, if any for 20x1 and 20x2 20x1 Actual return on plan assets Expected return on plan assets Experience gain (loss) 5. Calculate the amortization of gain or loss, if any for 20x1 and 20x2 Cumulative unamortized gains(losses) Corridor for gain/loss amortization Excess, if any Amortization period Amount of gain/loss to amortize, if any for 20x2 $ 20x2 20x1 20x2 (65,000) +6. Calculate pension expense (sometimes referred to not pension cost) for 20x1 and 20x2 20x1 20x2 Service Cost 87,000 98,000 Interest Return Amortization of PSC Amortization of gain/loss Net Pension Cost 7. Make journal entries to record pension expense for 20x1 and 20x2

FINANCIAL ACCOUNTING
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 information relate to the defined benefit pension plan of Lorentz Corp. as of 1/1/x1 Projected benefit obligation Fair value of plan assets Unrecognized prior service cost Unrecognized net pension gain or (loss) 1,655,000 1,513,500 221,600 (65,000) Pension data for 20x1 and 20x2: 20x1 20x2 Service cost 88,000 99,000 Contributions to pension plan 120,000 125,000 Benefits paid to retirees 132.000 140,000 Actual retum on pension plan assets 26,350 180,000 Amortization of prior service costs 53,000 42,000 Settlement interest rate 11% 11% Expected rate of return on plan assets 10% 10% Accumulated benefit obligation 12/31 1,620,000 Vested benefit obligation 12/31 1,200,000 Average remaining service lives of employees 12 years 1,850,000 1,500,000 14 years 1. Calculate the PBO at 12/31/x1 and 12/31/x2 20x1 20x2 Beginning balance Service cost 1,655,000 88,000 1,803,500 99,000 Interest Benefits paid to retirees Ending balance 2 Calculate the fund balance at 12/31/x1 and 12/31/x2 Beginning balance Contributions to pension plan Actual return on pension plan assets Benefits paid to retirees Ending balance 3. The corridor for amortization of gain or loss is, for 20x1 $ 20x1 20x2 1,513,500 4. Calculate the experience gain or loss, if any for 20x1 and 20x2 20x1 Actual return on plan assets Expected return on plan assets Experience gain (loss) 5. Calculate the amortization of gain or loss, if any for 20x1 and 20x2 Cumulative unamortized gains(losses) Corridor for gain/loss amortization Excess, if any Amortization period Amount of gain/loss to amortize, if any for 20x2 $ 20x2 20x1 20x2 (65,000) +6. Calculate pension expense (sometimes referred to not pension cost) for 20x1 and 20x2 20x1 20x2 Service Cost 87,000 98,000 Interest Return Amortization of PSC Amortization of gain/loss Net Pension Cost 7. Make journal entries to record pension expense for 20x1 and 20x2
Transcribed Image Text:The following information relate to the defined benefit pension plan of Lorentz Corp. as of 1/1/x1 Projected benefit obligation Fair value of plan assets Unrecognized prior service cost Unrecognized net pension gain or (loss) 1,655,000 1,513,500 221,600 (65,000) Pension data for 20x1 and 20x2: 20x1 20x2 Service cost 88,000 99,000 Contributions to pension plan 120,000 125,000 Benefits paid to retirees 132.000 140,000 Actual retum on pension plan assets 26,350 180,000 Amortization of prior service costs 53,000 42,000 Settlement interest rate 11% 11% Expected rate of return on plan assets 10% 10% Accumulated benefit obligation 12/31 1,620,000 Vested benefit obligation 12/31 1,200,000 Average remaining service lives of employees 12 years 1,850,000 1,500,000 14 years 1. Calculate the PBO at 12/31/x1 and 12/31/x2 20x1 20x2 Beginning balance Service cost 1,655,000 88,000 1,803,500 99,000 Interest Benefits paid to retirees Ending balance 2 Calculate the fund balance at 12/31/x1 and 12/31/x2 Beginning balance Contributions to pension plan Actual return on pension plan assets Benefits paid to retirees Ending balance 3. The corridor for amortization of gain or loss is, for 20x1 $ 20x1 20x2 1,513,500 4. Calculate the experience gain or loss, if any for 20x1 and 20x2 20x1 Actual return on plan assets Expected return on plan assets Experience gain (loss) 5. Calculate the amortization of gain or loss, if any for 20x1 and 20x2 Cumulative unamortized gains(losses) Corridor for gain/loss amortization Excess, if any Amortization period Amount of gain/loss to amortize, if any for 20x2 $ 20x2 20x1 20x2 (65,000) +6. Calculate pension expense (sometimes referred to not pension cost) for 20x1 and 20x2 20x1 20x2 Service Cost 87,000 98,000 Interest Return Amortization of PSC Amortization of gain/loss Net Pension Cost 7. Make journal entries to record pension expense for 20x1 and 20x2
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