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On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances. Projected benefit obligation Fair value of plan assets $4,420,000 4,210,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $506,000 are created. Other data related to the pension plan are as follows. Service cost Prior service cost amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 2020 $151,000 0 239,000 198,000 252,600 6% 2021 $176,000 92,000 289,000 275,000 257,000 8%

On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances. Projected benefit obligation Fair value of plan assets $4,420,000 4,210,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $506,000 are created. Other data related to the pension plan are as follows. Service cost Prior service cost amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 2020 $151,000 0 239,000 198,000 252,600 6% 2021 $176,000 92,000 289,000 275,000 257,000 8%

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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On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances. Projected benefit obligation Fair value of plan assets Service cost The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $506,000 are created. Other data related to the pension plan are as follows. Prior service cost amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets Items Balance, Jan, 1, 2020 Service cost Interest cost Actual return $4,420,000 xt Contributions Benefits 4,210,000 Journal entry for 2020 2020 $151,000 0 239,000 198,000 Prepare a pension worksheet for the pension plan for 2020 and 2021. (Enter all amounts as positive.) 252,600 $ 6% 2021 $176,000 92,000 289,000 275,000 257,000 Annual Pension Expense 151.000 442,000 8 % 255,600 337,400 Cr Cr. Y $ Cash 1000000 238,000 238,000 UUUU Cr. Cr.
Transcribed Image Text:On January 1, 2020, Sheridan Company has the following defined benefit pension plan balances. Projected benefit obligation Fair value of plan assets Service cost The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $506,000 are created. Other data related to the pension plan are as follows. Prior service cost amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets Items Balance, Jan, 1, 2020 Service cost Interest cost Actual return $4,420,000 xt Contributions Benefits 4,210,000 Journal entry for 2020 2020 $151,000 0 239,000 198,000 Prepare a pension worksheet for the pension plan for 2020 and 2021. (Enter all amounts as positive.) 252,600 $ 6% 2021 $176,000 92,000 289,000 275,000 257,000 Annual Pension Expense 151.000 442,000 8 % 255,600 337,400 Cr Cr. Y $ Cash 1000000 238,000 238,000 UUUU Cr. Cr.
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