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Ludell Corp. shows the following data- Projected benefit obligation 1/1/19-             $100,000 Plan Assets 1/1/19-              &nbs

  1. Ludell Corp. shows the following data-

Projected benefit obligation 1/1/19-             $100,000

Plan Assets 1/1/19-                                        $100,000

Settlement rate - 10%                         Service Cost - $9,000 Contribution - $8,000

Actual/expected returns-$10,000      Benefits paid-$7,000

PSC amortization-$2,000.

A. Prepare the pension worksheet showing the journal entry for pension expense.

B. Show Year End balances in the pension accounts (Memo record and OCI accounts included

C. Indicate amounts to be reported on Balance sheet and Income statements.

Solutions

Expert Solution

(a) Pension worksheet
Ludell Corp.
Pension Worksheet-2019
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, 2019 Not given Dr. $         -   Cr. $         -   Cr. $   100,000 Cr. $   100,000 Dr.
Service cost $             9,000 Dr. $       9,000 Cr.
Interest cost (100000*10%) $           10,000 Dr. $     10,000 Cr.
Actual/expected return $           10,000 Cr. $     10,000 Dr.
Amortization of PSC $             2,000 Dr. $    2,000 Cr.
Contributions $    8,000 Cr. $       8,000 Dr.
Benefits $       7,000 Dr. $       7,000 Cr.
Journal entry for 2019 $           11,000 Dr. $    8,000 Cr. $    2,000 Cr. $         -   Cr. $    1,000 Cr.
Accumulated OCI, Dec 31, 2018 Not given Dr. $         -   Cr.
Balance, Dec 31, 2019 Dr. $         -   Cr. $    1,000 Cr. $   112,000 Cr. $   111,000 Dr.
Journal entry
Account Titles and Explanation Debit Credit
Pension Expense $           11,000
         Pension Asset/ Liability $     1,000
         Cash $     8,000
         OCI-PSC $     2,000
(To record pension expense)
Pension Expense $              11,000
Projected Benefit Obligation 12/31/19 $            112,000
Plan Assets 12/31/19 $            111,000

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ekkarill92 answered 1 year ago
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