Question

In: Accounting

Carla Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about...

Carla Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan.

January 1, 2020 December 31, 2020
Vested benefit obligation $1,480 $1,870
Accumulated benefit obligation 1,870 2,670
Projected benefit obligation 2,500 3,260
Plan assets (fair value) 1,690 2,630
Settlement rate and expected rate of return 10%
Pension asset/liability 810 ?
Service cost for the year 2020 400
Contributions (funding in 2020) 690
Benefits paid in 2020 200

Prepare a 2020 pension worksheet. (Enter all amounts as positive.)

CARLA COMPANY
Pension Worksheet—2020

General Journal Entries

Memo Record Entries

Items

Annual Pension
Expense

Cash

OCI— Gain/
Loss

Pension Asset/
Liability

Projected Benefit
Obligation

Plan
Assets

Balance, Jan. 1, 2020

$

$

$

$

$

$

Service cost
Interest cost
Actual return
Unexpected gain
Contributions
Benefits
Liability increase
Journal entry for 2020

$

$

Accumulated OCI, Dec. 31, 2019
Balance, Dec. 31, 2020

$

$

$

$

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List of Accounts

Prepare the journal entries at December 31, 2020, to record pension expense and related pension transactions. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Dec. 31, 2020

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Solutions

Expert Solution

Carla Company
Pension Worksheet 2020
General Journal Entries Memo record
Items Annual Pension Cash OCI - Gain/Loss Pension Asset/Liability Projected Benefit Plan Assets
Balance Jan 1, 2020 810 Cr 2500 Cr 1690 Dr
Service cost 400 Dr 400 Cr
Interest Cost 250 Dr 250 Cr
Actual return 450 Cr 450 Dr
Unexpected Gain 281 Dr 281 Cr
Contributions 690 Cr 690 Dr
Benefits 200 Dr 200 Cr
Liability Increases 310 Dr 310 Cr
Journal Entry for 2020 481 Dr 690 Cr 29 Dr 180 Dr
Accumulated OCI Dec 31, 2019 0
Balance, Dce 31, 2020 29 Dr 630 Cr 3260 Cr 2630 Dr

Working Notes:
Actual returns = (2630-1690)-690+200 = 450
Liability increase = (3260-2500)-(400+250-200) = 310

Date Particulars Debit ($) Credit ($)
Dec 31, 2020 Other Comprehensive loss (G/L) 29
Pension Expenses 481
Pension Asset/Liability 180
Cash 690

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