In: Accounting
a. Computation of Pension Expense for the year 2019 | ||||||||||
Service cost | $ 90,000 | |||||||||
Interest cost | (700000*10%) | $ 70,000 | ||||||||
Expected return on the plan assets | (640000*10%) | $ (64,000) | ||||||||
Amortization of past service cost | $ - | |||||||||
Amortization of net loss | $ - | |||||||||
Pension Expense | $ 96,000 | |||||||||
b. Pension worksheet | ||||||||||
Pension Worksheet-2019 | ||||||||||
General Journal Entries | Memo Record | |||||||||
Items | Annual Pension Expense | Cash | Pension Asset/ Liability | Projected Benefit Obligation | Plan Assets | |||||
Balance, Jan.1, 2019 | $ 60,000 | Cr. | $ 700,000 | Cr. | $ 640,000 | Dr. | ||||
Service cost | $ 90,000 | Dr. | $ 90,000 | Cr. | ||||||
Interest cost (700000*10%) | $ 70,000 | Dr. | $ 70,000 | Cr. | ||||||
Actual/Expected return | $ 64,000 | Cr. | $ 64,000 | Dr. | ||||||
Contributions | $ 105,000 | Cr. | $ 105,000 | Dr. | ||||||
Benefits | $ 40,000 | Dr. | $ 40,000 | Cr. | ||||||
Journal entry for 2019 | $ 96,000 | Dr. | $ 105,000 | Cr. | $ 9,000 | Dr. | ||||
Balance, Dec 31, 2019 | $ 51,000 | Cr. | $ 820,000 | Cr. | $ 769,000 | Dr. | ||||
c. Journal entry | ||||||||||
Account Titles and Explanation | Debit | Credit | ||||||||
Pension Expense | $ 96,000 | |||||||||
Pension Asset/ Liability | $ 9,000 | |||||||||
Cash | $ 105,000 | |||||||||
(To record pension expense) | ||||||||||
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