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P20.8 (LO2,4,5) (Comprehensive 2-Year Worksheet) Lemke SA sponsors a defined benefit pension plan for its employees....

P20.8 (LO2,4,5) (Comprehensive 2-Year Worksheet) Lemke SA sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2019 and 2020.

2019 2020
Defined benefit obligation, Jan1 600,000
Plan Assets(fair value), Jan 1 410,000
Pension asset/liability, Jan 1 190,000
Service Cost 40,000 59,000
Discount(interest)rate 10% 10%
Actual return on plan assets 36,000 61,000
Annual Contributions 97,000 81,000
Benefits paid retires 31,500 54,000
Increase in defined benefit obligation due to changes in actuarial assumptions 87,000 0
Accumulated benefit obligation at Dec 31 721,800 789,000
Vested benefit obligation at Dec 31 464,000

Instructions

a. Prepare a pension worksheet presenting both years 2019 and 2020.

b. Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.

C. For 2020, indicate the pension amounts reported in the financial statements.

Solutions

Expert Solution

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ekkarill92 answered 2 years ago
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