INTERMEDIATE ACCT.-MYLAB COMBO ACCESS
3rd Edition
ISBN: 9780137391707
Author: GORDON
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 19, Problem 19.17BE
a.
To determine
The value of amortization expense at the end of the year.
Given information:
Opening balance of its unamortized gain is equal to $136,000.
Opening balance of the projected benefit obligation is $1,150,000.
Opening balance of the plan asset at fair value is $1,278,000.
Average remaining service life is 20 years.
b.
To determine
The value of amortization expense at the end of the year and journal entry of it.
Given information:
Opening balance of its unamortized gain is equal to $136,000.
Opening balance of the projected benefit obligation is $1,150,000.
Opening balance of the plan asset at fair value is $1,278,000.
Average remaining service life is 20 years.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Hijo Corp. is a publicly accountable entity that operates a defined benefit plan for its employees. Data relating to the pension plan is as follows:
Defined benefit obligation (DBO), December 31, 2019
$22,300,000
Plan assets, December 31, 2019
24,500,000
Current service costs (CSC), December 31, 2020
2,200,000
Benefits paid to retirees, December 31, 2020
1,000,000
Actual return on plan assets, December 31, 2020
800,000
DBO, December 31, 2020, per actuary
24,000,000
Yield on high-quality corporate bonds
4%
What is the total gain or loss that will flow to the other comprehensive income (OCI) part of the statement of comprehensive income for the year ended December 31, 2020?
Question 12 options:
a)
$572,000 loss
b)
$180,000 loss
c)
$212,000 gain
d)
$392,000 gain
Puhlman Inc. provides a defined benefit pension plan to its employees. It smooths recognition of its gains and
losses when computing its market-related value to compute expected return. Additional information follows:
December 31,
Description
20X1
20X0
? $2,500,000
2,150,000
2,100,000
PBO
АВО
$2,335,000
Fair value of plan assets
Market-related value of plan assets (smoothed
recognition)
Benefit payments made
AOCI-net actuarial (gain) loss
AOCI-prior service cost
Balance sheet pension asset (liability)
2,342,800
272,000
114,000
2,100,000
231,000
-0-
400,000
(400,000)
214,000
321,000
129,000
Service cost
Contribution
Actual return
Discount rate for PBO
9%
10%
Expected rate of return
Average remaining service life of employees
10%
10%
15 years
15 years
During 20X1, the PBO increased by $33,000 due to a decrease in the discount rate from the previous year. The
20X0 discount rate assumption was used to compute 20X1 service cost and interest cost.
Required:
1. Compute the fair value of plan…
Helv Industries sponsors a defined-benefit pension plan for its employees. As of January 1, 2020, the pension plan reported a Projected Benefit Obligation of $1,334,000 and fair value of Plan Assets of $996,000.
Helv also reports the following as of January 1, 2020:
Dr (Cr)
Net pension asset/liability
$ (338,000)
Accumulated other comprehensive income (AOCI)
Prior service cost
$ 100,000
Gains/Losses
$ -
Additionally, the following information is available for 2020:
Service cost
$ 306,000
Actual return of plan assets
$ 55,000
Amortization of prior service costs
$ 5,000
Benefits paid to retirees
$ 420,000
Contributions to the plan
$ 285,000
Discount…
Chapter 19 Solutions
INTERMEDIATE ACCT.-MYLAB COMBO ACCESS
Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Prob. 19.10BECh. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.25BECh. 19 - Prob. 19.26BECh. 19 - Prob. 19.27BECh. 19 - Prob. 19.28BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Employee Stock Options. Equity-Classified Awards....Ch. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - Prob. 19.12ECh. 19 - Prob. 19.13ECh. 19 - Prob. 19.14ECh. 19 - Prob. 19.15ECh. 19 - Prob. 19.16ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.4PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 2FSCCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- please help mearrow_forwardThe following information relates to the pension plan for the employees of Blossom Co.: Accum, beneht obligation Projected benefit obligation Fair value of plan assets AOCI - net (gain) or loss Settlement rate (for year) Expected rate of return (for year) 1/1/20 The corridor for 2021 is $10240000 10765000 9925000 -0- 12/31/20 $10660000 11458000 11920000 (1612000) 9% 9% 12/31/21 $ 13600000 15007000 13054000 (1780000) 9% 8% Blossom estimates that the average remaining service life is 16 years. Blossom's contribution was $1423000 in 2021 and benefits paid were $1087000.arrow_forwardMarigold Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the following balances related to this plan. Plan assets (market-related value) $269.400 Projected benefit obligation 334.400 Pension asset/liability 65,000 Cr. Prior service cost 89,600 OCI-Loss 39,700 As a result of the operation of the plan during 2021, the actuary provided the following additional data for 2021. Service cost $44,500 Actual return on plan assets 26,900 Amortization of prior service cost 12,000 Contributions 64,400 Benefits paid retirees 41,400 Settlement rate 7 % Expected return on plan assets 8 % Average remaining service life of active employees 10 years Indicate the pension amounts reported in the financial statements. Marigold Corp. Income Statement (Partial) Marigold Corp. Comprehensive Income Statement $XXXX $XXXX Marigold Corp. Partial Balance Sheet $ 2$arrow_forward
- Sandhill Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2025 and 2026. Projected benefit obligation, January 1 Plan assets (fair value and market-related value), January 1 Pension asset/liability, January 1 Prior service cost, January 1 Service cost Settlement rate Expected rate of return Actual return on plan assets Amortization of prior service cost Annual contributions Benefits paid retirees Increase in projected benefit obligation due to changes in actuarial assumptions Accumulated benefit obligation at December 31 Average service life of all employees Vested benefit obligation at Decem -31 (a1) 2025 Amortization of the loss $ $596,000 411,600 184,400 Cr. 161,400 40,300 10% 10% 35,800 69,500 97,300 31,200 87,100 720,200 Calculate the amortization of the loss (2026) using the corridor approach. 2026 $58,800 10% 10% 61,100 50,500 80,500 53,900 0 792,000 20 years 463,600arrow_forwardCey Company has a defined benefit pension plan. Cey's policy is to fund net periodic pension cost annually, payment to an independent trustee being made 2 months after the end of each year. Data relating to the pension plan for year 5 are as follows: Net pension cost for year 5 Unrecognized prior service cost, 12/31/Y5 Accumulated benefit obligation, 12/31/Y5 Fair value of plan assets, 12/31/Y5 Projected benefit obligation 12/31/Y5 How much should appear on Cey's balance sheet at December 31, year 5, for pension liability? Current $190,000 $190,000 $0 Noncurrent $150,000 $330,000 $0 $190,000 150,000 480,000 500,000 500,000 $480,000arrow_forwardJean Co. sponsors a defined benefit pension plan. For the current year ended December 31, the following information relevant to the plan has been accumulated: Defined benefit obligation, 1/1 Fair value of plan assets, 1/1 P5,000,000 4,500,000 500,000 1,000,000 250,000 1,050,000 250,000 Current service cost Past service cost Return on plan assets FV of DBO settled Gain on settlement Decrease in defined benefit obligation due to changes in actuarial assumptions 400,000 Discount rate 8% Requirements: 1. Calculate the amount that the entity would recognize in profit or loss. (Service costs & Net Interest) 2. Calculate the amount that the entity would recognize in other comprehensive. (Remeasurement) 3. In the working papers computations, what balance of plan assets will be presented by Jean Co on December 31? 4. In the working papers computations, what balance of benefit obligation will be determined by Jean Co on December 31?arrow_forward
- Wildhorse Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $817,830 $993,330 Projected benefit obligation, January 1 819,000 936,000 Pension asset/liability, January 1 163,800 Cr. ? Prior service cost, January 1 292,500 280,800 Service cost 70,200 105,300 Actual and expected return on plan assets 28,080 35,100 Amortization of prior service cost 11,700 14,040 Contributions (funding) 134,550 140,400 Accumulated benefit obligation, December 31 585,000 643,500 Interest/settlement rate 10 % 10 % Compute pension expense for 2020 and 2021. Pension expense for 2020 $ Pension expense for 2021 $arrow_forwardWildhorse Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $817,830 $993,330 Projected benefit obligation, January 1 819,000 936,000 Pension asset/liability, January 1 163,800 Cr. ? Prior service cost, January 1 292,500 280,800 Service cost 70,200 105,300 Actual and expected return on plan assets 28,080 35,100 Amortization of prior service cost 11,700 14,040 Contributions (funding) 134,550 140,400 Accumulated benefit obligation, December 31 585,000 643,500 Interest/settlement rate 10 % 10 % Prepare the journal entries to record the pension expense and the company’s funding of the pension plan for both years.arrow_forwardWildhorse Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $817,830 $993,330 Projected benefit obligation, January 1 819,000 936,000 Pension asset/liability, January 1 163,800 Cr. ? Prior service cost, January 1 292,500 280,800 Service cost 70,200 105,300 Actual and expected return on plan assets 28,080 35,100 Amortization of prior service cost 11,700 14,040 Contributions (funding) 134,550 140,400 Accumulated benefit obligation, December 31 585,000 643,500 Interest/settlement rate 10 % 10 % Pension expense for 2020: $135,720 Pension expense for 2021: $177,840 Prepare the journal entries to record the pension expense and the company’s funding of the pension plan for both years. Date Account Titles and Explanation Debit Credit Dec.…arrow_forward
- Sheridan, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2021. Service cost $ 395000 Contributions to the plan 380000 Actual return on plan assets 320000 Projected benefit obligation (beginning of year) 3850000 Fair value of plan assets (beginning of year) 2650000 The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2021 is $395000. $515000. $335000. O $780000.arrow_forwardRosaria Co. sponsors a defined benefit pension plan. For the current year ended December 31, thefollowing information relevant to the plan has been accumulated:Defined benefit obligation, 1/1 P11,250,000Fair value of plan assets, 1/1 10,500,000Current service cost 1,050,000Past service cost 2,200,000Actual return on plan assets 600,000Decrease in defined benefit obligation due tochanges in actuarial assumptions300,000Discount rate 8%Requirements:1. In the working papers computations, what balance of plan assets will be determined?2. In the working papers computations, what balance of benefit obligation will be determined?3. Calculate the amount that the entity would recognize in profit or loss for the year in accordancewith the revised PAS 19.4. Calculate the amount that the entity would recognize in other comprehensive income for theyear in accordance with the revised PAS 19.arrow_forwardDell Company adopted a defined benefit pension plan on January 1, 20X1. Dell amortizes the initial prior service cost of $1,334,400 over 16 years. It assumes a 7% discount rate and an 8% expected rate of return. The following additional data are available for 20X1: Service cost for 20x1 Prior service cost amortization Employer contribution made at 12/31/20X1 Required: Compute the pension asset (liability) to be reported on Dell's December 31, 20X1, balance sheet. (A net pension liability should be indicated by a minus sign.) Answer is complete but not entirely correct. $ Pension asset (liability) to be reported $320,000 83,400 335,000 1,412,808arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning