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REQUIRED Below are beginning balances and other information for Smith Co.’s pension as of the beginning...

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

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