Question

In: Accounting

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:

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.

Prepare the journal entry to record pension expense.

Solutions

Expert Solution

Ayayai Company
Pension Worksheet- 2017
General Journal Entries Memo Record
Items Annual Pension Expense Cash OCI-Prior Service Cost Pension Asset/ Liability Projected Benefit Obligation Plan Assets
Balance, Jan 1, 2017 $   152,100 Dr. $        54,100 Cr. $           686,700 Cr. $     632,600 Dr.
Service cost $     91,200 Dr. $             91,200 Cr.
Interest cost (686,700*9%) $     61,803 Dr. $             61,803 Cr.
Actual return $     62,800 Cr. $       62,800 Dr.
Amortization of PSC $      9,800 Dr. $       9,800 Cr.
Contributions $     104,700 Cr. $     104,700 Dr.
Benefits $             40,500 Dr. $       40,500 Cr.
Journal entry for 2014 $   100,003 Dr. $     104,700 Cr. $       9,800 Cr. $        14,497 Dr.
Accumulated OCI, Dec.31, 2017 $   152,100 Dr.
Balance, Dec 31, 2018 $   142,300 Dr. $        39,603 Cr. $           799,203 Cr. $     759,600 Dr.
Journal entry
Account Titles and Explanation Debit Credit
Pension Expense $   100,003
Pension Asset/ Liability $     14,497
         OCI-PSC $         9,800
         Cash $     104,700
(To record pension expense)

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