Waterway 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. 2. 3. 4. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800. The company's funding policy requires a contribution to the pension trustee amounting to $144,681 for 2020. As of January 1, 2020, the company had a projected benefit obligation of $900,900, an accumulated benefit obligation of $795,300, and a debit balance of $397,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $599,900 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. Amortization of prior service cost was $49.700 in 2020. Amortization of net gain or loss was not required in 2020.
Waterway 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. 2. 3. 4. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800. The company's funding policy requires a contribution to the pension trustee amounting to $144,681 for 2020. As of January 1, 2020, the company had a projected benefit obligation of $900,900, an accumulated benefit obligation of $795,300, and a debit balance of $397,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $599,900 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. Amortization of prior service cost was $49.700 in 2020. Amortization of net gain or loss was not required in 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:(b)
Your answer is partially 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 O for the amounts.)
Account Titles and Explanation
Pension Expense
Pension Asset/Liability
Cash
Other Comprehensive Income (PSC)
eTextbook and Media
List of Accounts
Save for Later Last saved 2 minutes ago.
Debit
132581
Credit
Ⓒwrong
61800
144681
49700
Attempts: 3 of 5 used Submit Answer
Transcribed Image Text:Current Attempt in Progress
Waterway 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.
2.
3.
4.
(a)
The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,800.
The company's funding policy requires a contribution to the pension trustee amounting to $144,681 for 2020.
As of January 1, 2020, the company had a projected benefit obligation of $900,900, an accumulated benefit obligation of
$795,300, and a debit balance of $397,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to
$599,900 at the beginning of the year. The actual and expected return on plan assets was $54,000. The settlement rate was
9%. No gains or losses occurred in 2020 and no benefits were paid.
Amortization of prior service cost was $49.700 in 2020. Amortization of net gain or loss was not required in 2020.
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).)
Service Cost
Interest on Projected Benefit Obligation
Components of Pension Expense
Expected Return on Plan Assets
Amortization of Prior Service Cost
Pension Expense
eTextbook and Media
List of Accounts
$
$
55800
81081
-54000
49700
132581
Attempts: 1 of 5 used
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