In: Accounting
REQUIRED
Below are beginning balances and other information for Smith Co.’s
pension as of the beginning
of 2017.
Prepare a pension worksheet for 2017:
Enter beginning balances into the worksheet (be sure to designate
whether each item has
a debit or credit balance – use DR and CR or use parentheses for
credits).( 2 points)
Complete the worksheet for 2017, including totals in columns for
which balances are
brought forward to 2018. (14 points)
Prepare the 2017 pension expense entry ( 4 points)
Beginning balances (January 1, 2017)
Other Comprehensive Income – Gains/Losses $190,000 DR
Other Comprehensive Income – Prior Service Cost $325,000 DR
Pension Asset/Liability $250,000 CR
Pension Plan Assets $550,000 DR
Projected Benefit Obligation $800,000 CR
Other Information
Benefits paid to retirees during 2017 $ 95,000
Funding of pension plan at the end of 2017 $125,000
Service cost earned in 2017 $ 65,000
Actual ROA 8%
Expected ROA 12%
Settlement (discount) rate 9%
Average service life per employee 10 years
Check Figures
Pension Expense $114,500