Question
In: Accounting
BEST CO sponsors a defined benefit pension plan for its employees. On January 1, 2010, the...
BEST CO sponsors a defined benefit pension plan for its employees.
On January 1, 2010, the following balances relate to this plan.
GHS Plan assets 480,000
Defined benefit obligation 625,000
Pension asset/liability 45,000
Unrecognized past service cost 100,000
As a result of the operation of the plan during 2010, the following additional data are provided by the actuary. Service cost for 2010 is 90,000
Discount rate, 9%
Actual return on plan assets in 2010 is 57,000
Amortization of past service cost 19,000
Expected return on plan assets 52,000
Unexpected loss from change in defined benefit obligation, due to change in actuarial predictions 76,000
Contributions in 2010 is 99,000
Benefits paid retirees in 2010 is 85,000
Instructions
(a) Using the data above, compute pension expense for BEST Co. for the year 2010 by preparing a pension worksheet that shows the journal entry for pension expense and the year-end balances in the related pension accounts.
(b) At December 31, 2010, prepare a schedule reconciling the funded status of the plan with the pension amount reported on the statement of financial position.
Solutions
Expert Solution
| Sollution (a) Pension worksheet | ||||||||||||||
| BEST CO | ||||||||||||||
| Pension Worksheet-2010 | ||||||||||||||
| General Journal Entries | Memo Record | |||||||||||||
| Items | Annual Pension Expense | Cash | OCI-Prior Service Cost | OCI-Gain/Loss | Pension Asset/ Liability | Projected Benefit Obligation | Plan Assets | |||||||
| Balance, Jan.1, 2010 | Dr. | Cr. | $145,000.00 | Cr. | $625,000.00 | Cr. | $480,000.00 | Dr. | ||||||
| Service cost | $90,000.00 | Dr. | $90,000.00 | Cr. | ||||||||||
| Interest cost (625000*9%) | $56,250.00 | Dr. | $56,250.00 | Cr. | ||||||||||
| Actual return | $57,000.00 | Cr. | $57,000.00 | Dr. | ||||||||||
| Unexpected Gain on assets(note-1) | $5,000.00 | Dr. | $5,000.00 | Cr. | ||||||||||
| Amortization of PSC | $19,000.00 | Dr. | $19,000.00 | Cr. | ||||||||||
| Contributions | $99,000.00 | Cr. | $99,000.00 | Dr. | ||||||||||
| Benefits | $85,000.00 | Dr. | $85,000.00 | Cr. | ||||||||||
| Liabilty increase | $76,000.00 | Dr | $76,000.00 | Cr. | ||||||||||
| Journal entry for 2010 | $113,250.00 | Dr. | $99,000.00 | Cr. | $19,000.00 | Cr. | $71,000.00 | Dr | $66,250.00 | Cr. | ||||
| Accumulated OCI, Dec 31, 2009 | $100,000.00 | Dr. | $0.00 | Cr. | ||||||||||
| Balance, Dec 31, 2010 | $81,000.00 | Dr. | $71,000.00 | Dr | $211,250.00 | Cr. | $762,250.00 | Cr. | $551,000.00 | Dr. | ||||
| Journal entry | ||||||||||||||
| Account Titles and Explanation | Debit | Credit | ||||||||||||
| Pension Expense | $113,250.00 | |||||||||||||
| OCI-GAIN/LOSS | $71,000.00 | |||||||||||||
| Cash | $99,000.00 | |||||||||||||
| OCI-PSC | $19,000.00 | |||||||||||||
| Pension Asset/ Liability | $66,250.00 | |||||||||||||
| Pension Asset/ Liability | ||||||||||||||
| (To record pension expense) | ||||||||||||||
| Note:-1 |
 ekkarill92 answered 1 year agoRelated SolutionsBEST CO sponsors a defined benefit pension plan for its employees. On January 1, 2010, the...BEST CO sponsors a defined benefit pension plan for its
employees. On January 1, 2010, the following balances relate to
this plan. GHS Plan assets 480,000 Defined benefit obligation
625,000 Pension asset/liability 45,000 Unrecognized past service
cost 100,000 As a result of the operation of the plan during 2010,
the following additional data are provided by the actuary. Service
cost for 2010 90,000 Discount rate, 9% Actual return on plan assets
in 2010 57,000 Amortization of past service cost 19,000...
Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...
Teal Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances relate to
this plan.
Plan assets
$489,900
Projected benefit obligation
616,700
Pension asset/liability
126,800
Accumulated OCI (PSC)
95,600
Dr.
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
Service cost
$86,900
Settlement rate, 9%
Actual return on plan assets
57,100
Amortization of prior service cost
19,500
Expected return on plan assets...
Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...
Teal Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances relate to
this plan.
Plan assets
$489,900
Projected benefit obligation
616,700
Pension asset/liability
126,800
Accumulated OCI (PSC)
95,600
Dr.
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
Service cost
$86,900
Settlement rate, 9%
Actual return on plan assets
57,100
Amortization of prior service cost
19,500
Expected return on plan assets...
Flint Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...Flint Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances relate to
this plan.
Plan assets
$470,900
Projected benefit obligation
609,900
Pension asset/liability
139,000
Accumulated OCI (PSC)
99,800
Dr.
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
Service cost
$93,800
Settlement rate, 10%
Actual return on plan assets
54,500
Amortization of prior service cost
19,800
Expected return on plan assets...
Bridgeport Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...Bridgeport Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances related to
this plan.
Plan assets (market-related value)
$536,000
Projected benefit obligation
652,000
Pension asset/liability
116,000
Cr.
Prior service cost
86,000
Net gain or loss (debit)
99,000
As a result of the operation of the plan during 2020, the actuary
provided the following additional data for 2020.
Service cost
$124,000
Settlement rate, 9%; expected return rate, 10%
Actual return on plan assets...
Cullumber Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2021, the...Cullumber Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2021, the following balances related to
this plan.
Plan assets (market-related value)
$270,400
Projected benefit obligation
342,400
Pension asset/liability
72,000
Cr.
Prior service cost
89,500
OCI—Loss
38,400
As a result of the operation of the plan during 2021, the actuary
provided the following additional data for 2021.
Service cost
$44,200
Actual return on plan assets
27,600
Amortization of prior service cost
11,900
Contributions
64,400
Benefits paid...
Pharoah Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the...Pharoah Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2017, the following balances relate to
this plan.
Plan assets $498,300
Projected benefit obligation 614,700
Pension asset/liability 116,400
Accumulated OCI (PSC) 96,900 Dr.
As a result of the operation of the plan during 2017, the
following additional data are provided by the actuary.
Service cost $92,500
Settlement rate, 9%
Actual return on plan assets 54,200
Amortization of prior service cost 18,100
Expected return on plan assets...
Bridgeport Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...Bridgeport Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances relate to
this plan.
Plan assets
$469,800
Projected benefit obligation
607,000
Pension asset/liability
137,200
Accumulated OCI (PSC)
97,100
Dr.
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
Service cost
$91,100
Settlement rate, 8%
Actual return on plan assets
54,400
Amortization of prior service cost
19,100
Expected return on plan assets...
Scottsdale Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the...Scottsdale Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2017, the following balances relate to
this plan.
Plan assets $480,000
Projected benefit obligation 625,000
Accumulated OCI (PSC) 100,000 Dr.
Accumulated OCI (Gain/Loss) 85,000 Cr.
As a result of the operation of the plan during 2017, the
following additional data are provided by the actuary:
Service cost for 2017 $90,000
Settlement rate 9%
Actual return on plan assets in 2017 57,000
Expected return on plan assets...
1) Watt Inc sponsors a defined benefit pension plan for its employees. On January 1, 2017,...1) Watt Inc sponsors a defined benefit pension plan for its
employees. On January 1, 2017, the following balances ralate to
this plan.
Plan Assets 4,316,000
Projected benefit olbigation 4,300,000
Prior Service Cost (OCI) 840,000
Accumulated OCI- Loss 656,000
As a result of the operations of the plan during 2017, the
following additional data are provided by the actuary.
Service cost for 2017 523,000
Settlement & Expected return rate 10%
Actual return on plan assets 510,000
Average service life of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|