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 1 year ago

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