Question

In: Accounting

The following information is provided to you from Elgin Outboard Motor Company and their pension administration...

The following information is provided to you from Elgin Outboard
Motor Company and their pension administration firm:
Service Cost . . . . . . . . . . . . . . . . . . $81,650
Contribution to plan . . . . . . . . . . . . . . 162,300
Prior Service Cost Amortization. . . . . . . . . 3,600
Actual and Expected Return on Assets . . . . . . 88,650
Benefits Paid. . . . . . . . . . . . . . . . . . 48,000
Plan Assets, January 1, 2017 . . . . . . . . . . 877,445
Projected Benefit Obligation, January 1, 2017. . 897,000
Interest/Discount (settlement) rate. . . . . . . 7%
Accumulated OCI (PSC), January 1, 2017 . . . . . 36,000
Required
Complete the pension worksheet below for 2017, and prepare the
necessary journal entry at December 31, 2017.

Solutions

Expert Solution

Ans- Pension Worksheet

Journal Entries

Memo Record

Items

Annual Pension Expenses ($)

Cash ($)

OCI-Prior service cost ($)

Pension Asset/ Liability

Projected benefit obligation ($)

Plan Assets ($)

Balance January 1,2017

19,555

Cr.

897,000

Cr.

877,445

Dr.

Prior Service Cost

36,000

Dr.

36,000

Cr.

Amortize Prior Service Cost

3,600

Dr.

3,600

Cr.

Annual Service Cost

81,650

Dr.

81,650

Cr.

Interest Cost ($897,000*7/100)

62,790

Dr.

62,790

Cr.

Actual Return

88,650

Cr.

88,650

Dr.

Unexpected loss

Contribution

162,300

Cr.

162,300

Dr.

Banefits paid

48,000

Dr.

48,000

Cr.

Journal entry for 2017

59,390

Dr.

162,300

Cr.

50,955

Dr.

Accumulated OCI- December 31,2016

32,400

Dr.

Ending Balance December 31,2017

31,400

Dr.

1,029,440

Cr.

1,080,395

Dr.

Journal entry:-

December 31,2017	Pension Expenses A/c Dr.	$59,390
	OCI A/c Dr.	32,400
	Pension asset/ liability A/c Dr.	31,400
	Cash A/c		162,300
	Other Comprehensive Income Gain/Loss		39,110

ekkarill92 answered 1 year ago

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