Question

Exercise 20-10 (Part Level Submission) Oriole Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $469,100 Projected benefit obligation 575,200 Pension asset/liability 106,100 Accumulated OCI (PSC) 97,900 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $90,500 Settlement rate, 8% Actual return on plan assets 56,400 Amortization of prior service cost 18,800 Expected return on plan assets 53,400 Unexpected loss from change in projected benefit obligation,    due to change in actuarial predictions 75,600 Contributions 98,500 Benefits paid retirees 89,100

(a) Using the data above, compute pension expense for Oriole Corp. for the year 2020 by preparing a pension worksheet. (Enter all amounts as positive.)

Answer 1

Pension Worksheet 2020
Items	Annual Pension Expense	Cash	OCI-Prior Service Cost	OCI-Gain/(Loss)	Pension Asset/liability	Projected benefit obligation	Plan Asset
Balance, Jan 1,2020					$     (106,100.00)	$        (575,200.00)	$      469,100.00
Service Cost	$      90,500.00					$          (90,500.00)
Interest Cost	$      46,016.00					$          (46,016.00)
Actual return	$    (56,400.00)						$        56,400.00
Unexpected gain	$        3,000.00			$             3,000.00			$                       -
Amortisation of PSC	$      18,800.00		$    (18,800.00)
Liability increases				$        (75,600.00)		$          (75,600.00)
Contributions		$    (98,500.00)					$        98,500.00
Benefits						$             89,100.00	$      (89,100.00)
Journal entry for 2020	$    101,916.00	$    (98,500.00)	$    (18,800.00)	$        (72,600.00)	$       (57,216.00)	$        (123,016.00)	$        65,800.00
Accumulated OCI dec 31, 2019			$      97,900.00	$                          -
Balance, December 31, 2020			$      79,100.00	$        (72,600.00)	$     (163,316.00)	$        (698,216.00)	$      534,900.00
Net Pension Expense for 2020	$    101,916.00
Journal entry 31-12-2020
Account title & explaination	Debit	Credit
Pension Expense	$    101,916.00
OCI(Gain/loss)	$      72,600.00
OCI(PSC)		$      18,800.00
Cash		$      98,500.00
Net Pension Asset/liability		$      57,216.00
(Being pension expense and remeasurement loss recorded)
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