Question

The accountant for Sunland Corporation has developed the following information for the company's defined-benefit pension plan for 2019: Service cost $540,000 Actual return on plan assets 266,000 Annual contribution to the plan 936,000 Amortization of prior service cost 126,600 Benefits paid to retirees 68,000 Settlement rate 10% Expected rate of return on plan assets 8% The accumulated benefit obligation at December 31, 2019, amounted to $3,330,000.

Using the above information for Sunland Corporation, complete the pension work sheet for 2019 Prepare the journal entry to reflect the accounting for the company's pension plan for the year ending December 31, 2019.

Answer 1

Solution:	Pension Work-sheet 2019
		Annual	Cash	OCI	Gain/	Pension	Projected	Plan
		Pension Exp		(PSC)	Loss	Asset/Liability	Benefit obligation	Assets
	Service Cost	$540,000					($540,000)
	Actual return	($266,000)						$266,000
	Amortization of PSC	$126,600		($126,600)
	Contrybutions		($936,000)					$936,000
	Benefits						$68,000	($68,000)
	Bal on December 31 , 2019	$400,600	($936,000)	($126,600)		($662,000)	($472,000)	$1,134,000
2	Journal Entry
Date	Account titles & explanations	Debit	Credit
2019	Pension Expense	$400,600
	Pension Asset/Liability	$662,000
	Cash		$936,000
	Other Comprehensive income(PSC)		$126,600
	(Being Pension expense recorded)