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Ayayai Company provides the following information about its defined benefit pension plan for the year 2017....

Ayayai Company provides the following information about its defined benefit pension plan for the year 2017.

Service cost

$91,200

Contribution to the plan

104,700

Prior service cost amortization

9,800

Actual and expected return on plan assets

62,800

Benefits paid

40,500

Plan assets at January 1, 2017

632,600

Projected benefit obligation at January 1, 2017

686,700

Accumulated OCI (PSC) at January 1, 2017

152,100

Interest/discount (settlement) rate

9

%

Requirements:

  1. Using Excel prepare a pension worksheet inserting January 1, 2017, balances, and then showing December 31, 2017. Prepare the worksheet in good form based on examples in chapter 20 and chapter 20 exercises.
  2. Prepare the journal entry to record pension expense.

Solutions

Expert Solution

Items General Journal Enries Memo Record
Annual pension expense Dr./Cr. Cash Dr./Cr. Pension Assets/Liability Dr./Cr. Projected benefit obligation Dr./Cr. Plan Assets Dr./Cr. Unrecognised Past service Cost Dr./Cr.
Balance as on 31-12-2016         632,600 Cr         632,600 Dr
Past service cost         152,100 Cr 152100 Dr
Balance as on 01-01-2017        784,700 Cr        632,600 Dr 152,100 Dr
Service cost           91,200 Dr           91,200 Cr
interest cost           70,623 Dr           61,803 Cr
Actual return           62,800 Cr           62,800 Dr
Amortization of PSC             9,800 Dr 9800 Cr
Contribution         104,700 Cr         104,700 Dr
Benefits           40,500 Dr           40,500 Cr
Journal entry for 2017        108,823 Dr        104,700 Cr        4,123 Dr
Balance as on 31-12-2017 4123 Dr        897,203 Cr        759,600 Dr 142,300 Dr

ekkarill92 answered 9 months ago
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