Question
In: Accounting
You are provided the following information: Actual return on plan assets 3% Average tenure of plan...
You are provided the following information:
|
3% |
|
20 |
|
308 |
|
500 |
|
4% |
|
5% |
|
600 |
|
4,200 |
|
40 |
|
5,600 |
|
680 |
Perform the calculation for each of the following:
- (15) Projected benefit obligation 12/31
- (15) Plan assets 12/31
- (15) Pension expense
- (5) The gain or loss to be recognized for pension expense for the current year applying the corridor approach.
Solutions
Expert Solution
| Current Year | ||||
| 1 | Pension Expense | $ 694 | ||
| 2 | Journal entry | |||
| Account title & Explaination | Current Year | |||
| Debit | Credit | |||
| Annual pension expense | 694 | |||
| OCI-Prior Service Cost | 2 | |||
| OCI-(Gain/Loss) | 86 | |||
| Cash | 500 | |||
| Net Pension Asset/liability | 278 | |||
| (To record pension expense and remeasurement loss recorded) | ||||
| 3 | Plan Asset | 500 | ||
| Cash | 500 | |||
| (To record the contribution made) | ||||
| Net Pension Asset/liability | 308 | |||
| Cash | 308 | |||
| (To record benefit paid) | ||||
| 4 | Net Pension Asset/(liability) | $ (1,678) | ||
| 5 | Projected benefit obligation | $ (6,196) | ||
| Plan Asset | $ 4,518 | |||
| Plan Surplus/(Deficit) | $ (1,678) | |||
| Pension Worksheet | ||||||||
| Items | Annual Pension Expense | Cash | OCI-Prior Service Cost | OCI-Gain/(Loss) | Pension Asset/liability | Projected benefit obligation | Plan Asset | |
| Balance, Jan 1, | $ - | $ - | $ 40 | $ 600 | $ (1,400) | $ (5,600) | $ 4,200 | |
| Past Service Cost created | $ - | $ - | $ - | $ - | $ - | $ - | $ - | |
| Service Cost | $ 680 | $ - | $ - | $ - | $ (680) | $ - | ||
| Interest Cost | $ 224 | $ - | $ - | $ - | $ (224) | $ - | ||
| Actual return | $ (126) | $ - | $ - | $ - | $ - | $ 126 | ||
| Unexpected gain/ loss | $ (84) | $ - | $ (84) | $ - | $ - | $ - | ||
| Amortisation of PSC | $ 2 | $ - | $ (2) | $ - | $ - | $ - | ||
| Amortisation of OCI-Gain/loss | $ (2) | $ - | $ - | $ (2) | $ - | $ - | ||
| Liability (increases)/decreases | $ - | $ - | $ - | $ - | $ - | |||
| Contributions | $ - | $ (500) | $ - | $ - | $ - | $ 500 | ||
| Benefits | $ - | $ - | $ - | $ - | $ 308 | $ (308) | ||
| $ - | $ - | $ - | $ - | $ - | $ - | |||
| Journal entry for | $ 694 | $ (500) | $ (2) | $ (86) | $ (278) | $ (596) | $ 318 | |
| Accumulated OCI dec 31, 2017 | $ - | $ - | $ 40 | $ 600 | $ - | $ - | $ - | |
| Balance, December 31, | $ - |
 ekkarill92 answered 1 year agoRelated SolutionsCalculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information...Calculating Average Operating Assets, Margin, Turnover, Return
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Forchen, Inc., provided the following information for two of its
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Small Appliances
Division
Cleaning Products
Division
Sales
$34,670,000
$34,800,000
Operating income
2,773,600
1,392,000
Operating assets, January 1
6,394,000
5,600,000
Operating assets, December 31
7,474,000
6,000,000
Required:
1. For the Small Appliances Division,
calculate:
a. Average operating assets
$
b. Margin
%
c. Turnover
d. Return on investment (ROI)
%
2. For the Cleaning Products Division,
calculate:...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information...Calculating Average Operating Assets, Margin, Turnover, Return
on Investment (ROI)
Forchen, Inc., provided the following information for two of its
divisions for last year:
Small Appliances
Division
Cleaning Products
Division
Sales
$34,670,000
$29,000,000
Operating income
2,773,600
1,160,000
Operating assets, January 1
6,394,000
5,600,000
Operating assets, December 31
7,474,000
6,000,000
Required:
1. For the Small Appliances Division,
calculate:
a. Average operating assets
$ fill in the blank 1
b. Margin
fill in the blank 2
%
c. Turnover
fill in the...
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Expected return on plan assets = 50 million
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State of Economy
Probability that the state of economy occurs
Return if the state occurs
Asset AA
Return if the state occurs
Asset BB
BOOM
10%
40%
60%
AVERAGE
40%
20%
30%
BELOW AVERAGE
20%
20%
10%
POOR
30%
-20%
-30%
In addition to the above return distribution the two assets
(AA& BB) operate in different industries...
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Benefits to retirees 60,000 Expected return on plan assets
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Cash contributions 50,000 Settlement rate 6%
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Projected Benefit Obligation (PBO) 850,000
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Operating income
$0
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$
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Contribution
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$
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Fair value of plan
assets................................................
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Defined benefit
obligation............................................
6,200,000
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