INTERM.ACCT.:REPORTING...-CENGAGENOWV2
3rd Edition
ISBN: 9781337909358
Author: WAHLEN
Publisher: CENGAGE L
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Chapter 19, Problem 2MC
To determine
Identify the correct option for the given statement.
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8. How much is the plan asset at fair market value, December 31, 2021?9. How much is the accumulated benefit obligation, December 31, 2021?10. What is the prepaid(accrued) pension expense as of December 31, 2021?
8. How much is the plan asset at fair market value, December 31, 2021?9. How much is the accumulated benefit obligation, December 31, 2021?10. What is the prepaid(accrued) pension expense as of December 31, 2021?
Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2024 (the end of Beale's fiscal year), the
following pension-related data were available:
Projected Benefit Obligation
Balance, January 1, 2024.
Service cost
Interest cost, discount rate, 5
Gain due to changes in actuarial assumptions in 2024
Pension benefits paid
Balance, December 31, 2024
Plan Assets
Balance, January 1, 2024
Actual return on plan assets
(Expected return on plan assets, $45)
Cash contributions
Pension benefits paid
Balance, December 31, 2024
January 1, 2024, balances:
Pension asset
Prior service cost-AOCI (amortization $8 per year)
Net gain-AOCI (any amortization over 15 years)
($ in millions)
Balance, January 1, 2024
Service cost
Interest cost, 5%
Expected return on assets
Adjust for:
Loss on assets
Amortization of:
Prior service cost
Net gain
Gain on PBO
Cash funding
Retiree benefits
Balance, December 31, 2024
$
($ in millions)
$ 500
40
PBO
Required:
Prepare a pension spreadsheet…
Chapter 19 Solutions
INTERM.ACCT.:REPORTING...-CENGAGENOWV2
Ch. 19 - Prob. 1GICh. 19 - Prob. 2GICh. 19 - Prob. 3GICh. 19 - Prob. 4GICh. 19 - Prob. 5GICh. 19 - Prob. 6GICh. 19 - Prob. 7GICh. 19 - Prob. 8GICh. 19 - Prob. 9GICh. 19 - Prob. 10GI
Ch. 19 - Prob. 11GICh. 19 - Prob. 12GICh. 19 - Prob. 13GICh. 19 - Prob. 14GICh. 19 - Prob. 15GICh. 19 - Prob. 16GICh. 19 - Prob. 17GICh. 19 - Prob. 18GICh. 19 - Prob. 19GICh. 19 - Prob. 20GICh. 19 - Prob. 21GICh. 19 - Prob. 22GICh. 19 - Prob. 23GICh. 19 - The actuarial present value of all the benefits...Ch. 19 - Prob. 2MCCh. 19 - Prob. 3MCCh. 19 - Prob. 4MCCh. 19 - Prob. 5MCCh. 19 - Prob. 6MCCh. 19 - Which of the following is not a component of...Ch. 19 - Prob. 8MCCh. 19 - Prob. 9MCCh. 19 - Prob. 10MCCh. 19 - Prob. 1RECh. 19 - Prob. 2RECh. 19 - Pinecone Company has plan assets of 500,000 at the...Ch. 19 - Prob. 4RECh. 19 - Prob. 5RECh. 19 - Prob. 6RECh. 19 - Prob. 7RECh. 19 - Prob. 8RECh. 19 - Given the following information for Tyler Companys...Ch. 19 - At the beginning of Year 1, Cactus Company has...Ch. 19 - Prob. 11RECh. 19 - Prob. 1ECh. 19 - Prob. 2ECh. 19 - Prob. 3ECh. 19 - Prob. 4ECh. 19 - Prob. 5ECh. 19 - Prob. 6ECh. 19 - Prob. 7ECh. 19 - Prob. 8ECh. 19 - Prob. 9ECh. 19 - Prob. 10ECh. 19 - Prob. 11ECh. 19 - Prob. 12ECh. 19 - Prob. 13ECh. 19 - Refer to the information provided in E19-13....Ch. 19 - Prob. 15ECh. 19 - Prob. 16ECh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - Prob. 12PCh. 19 - Prob. 1CCh. 19 - Prob. 2CCh. 19 - Prob. 3CCh. 19 - Prob. 4CCh. 19 - Prob. 5CCh. 19 - Prob. 6CCh. 19 - Prob. 7CCh. 19 - Prob. 9C
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- 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_forwarda. Compute pension expense for 2020. Amortize the full pension gain/loss over the average service life of 15 years using the straight-line method. b. Compute PBO at December 31st, 2020. c. Compute the fair value of plan assets at December 31st, 2020. Please don't provide solution in an image based thankuarrow_forwardCullumber Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2025 and 2026. Plan assets (fair value), December 31 Projected benefit obligation, January 1 Pension asset/liability, January 1 Prior service cost, January 1 Service cost Actual and expected return on plan assets Amortization of prior service cost Contributions (funding) Accumulated benefit obligation, December 31 Interest/settlement rate No benefits were paid in 2025 or 2026. (a) Compute pension expense for 2025 and 2026. Pension expense for 2025 Pension expense for 2026 $ $ 2025 $873,750 875,000 175,000 Cr. 312,500 75,000 30,000 12,500 143,750 625,000 9% 2026 $1,061,250 1,000,000 ? 300,000 112,500 37,500 15,000 150,000 687,500 9%arrow_forward
- choose the correct letter of answerarrow_forwardBeale Management has a noncontributory, defined benefit pension plan. On December 31, 2024 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation Balance, January 1, 2024 Service cost Interest cost, discount rate, 5% Gain due to changes in actuarial assumptions in 2024 Pension benefits paid Balance, December 31, 2024 Plan Assets Balance, January 1, 2024 Actual return on plan assets (Expected return on plan assets, $44) Cash contributions Pension benefits paid Balance, December 31, 2024 January 1, 2024, balances: Pension asset Prior service cost-AOCI (amortization $7 per year) Net gain-AOCI (any amortization over 10 years) Req 1 to 3 ($ in millions) $ 600 39 Req 4 80 (29) $ 690 Complete this question by entering your answers in the tabs below. Req 5 Required: 1. to 3. Prepare the journal entries required for the pension during 2024. 4. Determine the balances at December 31, 2024, in the net gain-AOCI, and prior service…arrow_forwardSplish Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. Plan assets (fair value), December 31 Projected benefit obligation, January 1 Pension asset/liability, January 1 Prior service cost, January 1 Service cost Actual and expected return on plan assets Amortization of prior service cost Contributions (funding) Accumulated benefit obligation, December 31 Interest/settlement rate 2020 $712,980 714,000 142,800 Cr. 255,000 61,200 24,480 10,200 117,300 510,000 8% 2021 $865,980 816,000 ? 244,800 91,800 30,600 12,240 122,400 561,000 8 %arrow_forward
- Sandhill Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2025, the following balances relate to this plan. Plan assets Projected benefit obligation Pension asset/lability Accumulated OCI (PSC) (a) As a result of the operation of the plan during 2025, the following additional data are provided by the actuary. Service cost Settlement rate, 9% Actual return on plan assets Amortization of prior service cost Expected returson plan assets Unexpected loss from change in projected benefit obligation due to change in actuarial predictions Contributions Benentspaid retirees items Balance, Jan 1, 2025 Service cost $496,400 610,800 interest cost 114400 Actual return 98,000 Dr. Unexpected gain Using the data above, compute pension expense for Sandhill. for the year 2025 by preparing a pension worksheet. (Enter all amounts as positive.) $90.900 54,700 18.300 51.600 76.600 103.700 85,200 Annual Pension Expense C Cath SUPPORTarrow_forwardVernhey Corporation, which follows ASPE, provides the following information about its defined benefit pension plan for the year 2020: Current service cost Contribution to the plan Past service cost, effective December 31, 2020 Actual return on plan assets Benefits paid Net defined benefit liability at January 1, 2020 Plan assets at January 1, 2020 Defined benefit obligation at January 1, 2020 Interest/discount rate on the DBO and plan assets $144,000 182,600 60,000 160,000 95,000 20,000 1,780,000 1,800,000 9% Instructions 1 Prepare a pension work sheet: insert the January 1, 2020 balances and show the December 31, 2020 balances. Indicate credit entries by parentheses, e g. (25,000). b) Prepare all journal entries. c) What is the amount of the plan's surplus/deficit at December 31, 2020?arrow_forwardBeale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation Balance, January 1, 2021 Service cost Interest cost, discount rate, 5% Gain due to changes in actuarial assumptions in 2021 Pension benefits paid. Balance, December 31, 2021 Plan Assets Balance, January 1, 2021 Actual return on plan assets (Expected return on plan assets, $48) Cash contributions Pension benefits paid Balance, December 31, 2021 January 1, 2021, balances: Pension asset Prior service cost-AOCI (amortization $5 per year) Net gain-AOCI (any amortization over 10 years) ($ in millions) $ 710 43 84 (33) $804 ($ in millions) $ 660 68 33 (17) (33) $711 ($ in millions) $ 50 25 121arrow_forward
- Based upon this information, how would I make the following journal entries? Record annual pension expense. Record the change in plan assets. Record the change in the PBO. Record the cash contribution to plan assets. Record the retiree benefits paid.arrow_forwardFlint Enterprises provides the following information relative to its defined benefit pension plan. Balances or Values at December 31, 2020 Projected benefit obligation Accumulated benefit obligation Fair value of plan assets Accumulated OCI (PSC) Accumulated OCI-Net loss (1/1/20 balance, 0) Pension liability Other pension plan data for 2020: Service cost Prior service cost amortization Actual return on plan assets Expected return on plan assets Interest on January 1, 2020, projected benefit obligation Contributions to plan Benefits paid $2,743,700 1,980,300 2,290,800 212,000 45,800 451,900 $94,300 42,200 129,800 175,600 254,300 92,700 139,800arrow_forwardWildhorse Company provides the following information about its defined benefit pension plan for the year 2020. Service cost Contribution to the plan Prior service cost amortization Actual and expected return on plan assets Benefits paid Plan assets at January 1, 2020 Projected benefit obligation at January 1, 2020 Accumulated OCI (PSC) at January 1, 2020 Interest/discount (settlement) rate Items Pension Experse Balance, January 1, 2020 91200 Service cost 61801 Interest cost T 62800 Actual return 9800 Amortization of PSC Contributions Benefits Journal entry for 2020 Accumulated OCI, Dec 31, 2019 Balance, Dec 31, 2020 eTextbook and Media List of Accounts $91,200 104,700 9,800 62,800 40,500 632,600 686,700 152,100 9% eTextbook and Media 100003 Dr. Dr. cr. Cash Debit 104700 Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do na indent manually. If no entry is required, select "No Entry" for the account titles and…arrow_forward
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