Question
In: Accounting
Ludell Corp. shows the following data- Projected benefit obligation 1/1/19- $100,000 Plan Assets 1/1/19- &nbs
- 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 |
Feel free to ask any clarification, if required. Kindly
provide feedback by thumbs up, if satisfied. It will be highly
appreciated.
Thank you.
ekkarill92 answered 1 year agoRelated Solutions
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