Question

In: Accounting

On January 1, 2020, McGee Co. had the following balances: Projected benefit obligation

On January 1, 2020, McGee Co. had the following balances:

Projected benefit obligation $7,800,000

Fair value of plan assets 7,800,000

Other data related to the pension plan for 2020:

Service cost 315,000

Contributions to the plan 459,000

Benefits paid 450,000

Actual return on plan assets 444,000

Settlement rate 9%

Expected rate of return 6%

No prior service cost, no prior OCI gains/losses

Required:

(a) Prepare the journal entry to record pension expense, the contributions for 2020 and adjustments to Pension Asset/Liability and OCI (g/l).

(b) Answer the following questions:

(1) What is the plan assets balance on 12/31/2020?

(2) What is the Pension Benefit Obligation balance at December 31, 2020?

(3) What is the ending balance in the pension asset/liability at December 31, 2020?

(4) What is Pension Expense for 2020?

A pension worksheet is provided to help you calculate and answer the questions, although you are not required to use it but feel free to fill it out here if you would like to. If you do, please make sure to answer the questions in the response area, do not expect to be graded only on what you might have included in the worksheet.

(a) Prepare the journal entry to record pension expense, the contributions for 2020 and adjustments to Pension Asset/Liability and OCI (g/l).

(enter Journal entry here)

-->

(b) Answer the following questions. Type your response after each question:

(1) What is the plan assets balance on 12/31/2020? -->

(2) What is the Pension Benefit Obligation balance at December 31, 2020? -->

(3) What is the ending balance in the pension asset/liability at December 31, 2020? -->

(4) What is Pension Expense for 2020? -->

McGee Company, Pension Worksheet—2020
General Ledger Entries					Memo Record
Items	Annual Pension Expense	Cash	OCI – Gains/losses	Pension Asset/Liability	Projected Benefit Obligation	Plan Assets











Journal Entry

Expert Solution

ekkarill92 answered 1 year ago

On January 1, 2013, Smith Co. had the following balances: Projected benefit obligation 4,200,000 Fair value...

On January 1, 2013, Smith Co. had the following balances: Projected benefit obligation 4,200,000 Fair value of plan assets 3,750,000 The settlement rate is 10%. Expected return on plan assets is 8%. Other data related to the pension plan for 2013 are: Service cost 240,000 Amortization of prior service costs 54,000 Benefits paid 250,000 Actual return on plan assets 264,000 Amortization of net gain 18,000 Prepare all journal entries related to pensions for 2013

on january 1, 2015, newlin co. has the following balances: projected benefit obligation $2,100,000 fair value...

on january 1, 2015, newlin co. has the following balances: projected benefit obligation $2,100,000 fair value of plan assets 1,800,000 the settlement rate is 10%. other data related to the pension plan for 2015 are service cost $180,000 amortization of prior service costs 60,000 contributions 300,000 benefits paid 135,000 actual return on plan assets 237,000 amortization of net gain 18,000 the balance of the projected benefit obligation at december 31, 2015 is A.$2,490,000, B. $2,355,000, C.$2,340,000,D.2,310,000 The fair value of...

Novak Co. has the following defined benefit pension plan balances on January 1, 2020. Projected benefit...

Novak Co. has the following defined benefit pension plan balances on January 1, 2020. Projected benefit obligation 4555000 Fair value of plan assets 4555000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $599,000 are created. Other data related to the pension plan are: 2020 2021 Service cost 149,000 170,000 Prior service cost amortization 0 91,000 Contributions (funding) to the plan 201,000 183,000...

At January 1, 2020, Headland Company had plan assets of $286,300 and a projected benefit obligation...

At January 1, 2020, Headland Company had plan assets of $286,300 and a projected benefit obligation of the same amount. During 2020, service cost was $28,400, the settlement rate was 10%, actual and expected return on plan assets were $25,500, contributions were $20,600, and benefits paid were $17,900. Prepare a pension worksheet for Headland Company for 2020.

At January 1, 2020, QWS Company had plan assets of $278,000 and a projected benefit obligation...

At January 1, 2020, QWS Company had plan assets of $278,000 and a projected benefit obligation of the same amount. During 2020, service cost was $28,200, the settlement rate was 10%, actual and expected return on plan assets were $26,100, contributions were $20,200, and benefits paid were $17,700. Prepare a pension worksheet for QWS Company for 2020. QWS COMPANY General Journal Entries Memo Record Items Pension Expense Cash Pension Asset/Liability Projected Benefit Obligation Plan Assets 1/1/20 Service cost Interest cost...

On January 1, 2021, Pharoah Co. has the following balances: Projected benefit obligation Fair value of plan assets

On January 1, 2021, Pharoah Co. has the following balances: Projected benefit obligation $4800000 Fair value of plan assets 4200000 The settlement rate is 10%. Other data related to the pension plan for 2021 are: Service cost $312000 Amortization of prior service costs 68000 Contributions 352000 Benefits paid 327000 Actual return on plan assets 344000 Amortization of net gain 23200 The balance of the projected benefit obligation at December 31, 2021 is $5265000. $5280000. $5100000. $5592000.

On January 1, 2019, a company's defined benefit pension plan had a projected benefit obligation (PBO)...

On January 1, 2019, a company's defined benefit pension plan had a projected benefit obligation (PBO) of $380,000. The fair value of its pension plan assets on January 1 was $350,000. During 2019, the company contributed $50,000 to the pension plan and paid pension benefits to retirees in the amount of $70,000. The settlement rate for the pension plan for 2019 was 12%. Service cost for the year was estimated to be $109,000. The expected rate of return on pension...

On January 1, 2020, Ivanhoe Company has the following defined benefit pension plan balances. Projected benefit...

On January 1, 2020, Ivanhoe Company has the following defined benefit pension plan balances. Projected benefit obligation $4,420,000 Fair value of plan assets 4,260,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $506,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $151,000 $176,000 Prior service cost amortization 0 92,000 Contributions (funding) to the plan...

On January 1, 2020, Sage Company has the following defined benefit pension plan balances. Projected benefit...

On January 1, 2020, Sage Company has the following defined benefit pension plan balances. Projected benefit obligation$4,571,000 Fair value of plan assets4,210,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $492,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $152,000 $179,000 Prior service cost amortization 0 89,000 Contributions (funding) to the plan 236,000 285,000...

On January 1, 2020, Tamarisk Company has the following defined benefit pension plan balances. Projected benefit...

On January 1, 2020, Tamarisk Company has the following defined benefit pension plan balances. Projected benefit obligation $4,460,000 Fair value of plan assets 4,150,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $503,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $150,000 $182,000 Prior service cost amortization 0 92,000 Contributions (funding) to the plan...