Question
In: Accounting
Jackson Company has the following information for the company's defined-benefit pension plan for the year ended...
Jackson Company has the following information for the company's defined-benefit pension plan for the year ended December 31, 2021:
January 1, 2021 December 31, 2021
Projected benefit obligation $5,000,000 $5,510,000
Fair value of plan assets 2,500,000 3,200,000
Accumulated OCI (PSC) 1,080,000 600,000
Service cost for 2021 is $360,000 and amortization of prior service cost is $480,000. The company's funding of the plan in 2021 amounted to $1,050,000. Benefit payments for the year totaled $600,000, The expected return on plan assets and the settlement rate were both 10%. In the company’s pension worksheet,
Select one:
A) Accumulated OCI (PSC) woud be increased by $480,000.
B) PBO would be decreased and Plan Assets would be increased by the $1,050,000 funding.
C)Both PBO and Plan Assets would be decreased by benefits paid of $600,000.
D) Cash would be decreased by benefits paid of $600,000
Cash would be decreased by benefits paid of $600,000.
Solutions
Expert Solution
Option (C) is correct.
| Pension Worksheet 2021 | ||||||||
| Items | Annual Pension Expense | Cash | OCI-Prior Service Cost | OCI-Gain/(Loss) | Pension Asset/liability | Projected benefit obligation | Plan Asset | |
| Balance, Jan 1,2021 | $ - | $ - | $ 1,080,000 | $ - | $ (2,500,000) | $ (5,000,000) | $ 2,500,000 | |
| Past Service Cost created | $ - | $ - | $ - | $ - | $ - | $ - | $ - | |
| Service Cost | $ 360,000 | $ - | $ - | $ - | $ (360,000) | $ - | ||
| Interest Cost | $ 500,000 | $ - | $ - | $ - | $ (500,000) | $ - | ||
| Actual return | $ (250,000) | $ - | $ - | $ - | $ - | $ 250,000 | ||
| Unexpected gain/ loss | $ - | $ - | $ - | $ - | $ - | $ - | ||
| Amortisation of PSC | $ 480,000 | $ - | $ (480,000) | $ - | $ - | $ - | ||
| Amortisation of OCI-Gain/loss | $ - | $ - | $ - | $ - | $ - | $ - | ||
| Liability (increases)/decreases | $ - | $ - | $ (250,000) | $ - | $ (250,000) | |||
| Contributions | $ - | $ (1,050,000) | $ - | $ - | $ - | $ 1,050,000 | ||
| Benefits | $ - | $ - | $ - | $ - | $ 600,000 | $ (600,000) | ||
| $ - | $ - | $ - | $ - | $ - | $ - | |||
| Journal entry for 2021 | $ 1,090,000 | $ (1,050,000) | $ (480,000) | $ (250,000) | $ 190,000 | $ (510,000) | $ 700,000 | |
| Accumulated OCI dec 31, 2020 | $ - | $ - | $ 1,080,000 | $ - | $ - | $ - | $ - | |
| Balance, December 31, 2021 | $ - | $ - | $ 600,000 | $ (250,000) | $ (2,310,000) | $ (5,510,000) | $ 3,200,000 | |
| · Please do upvote if you found the answer useful. | $ - | |||||||
| · Feel free reach in the comment section in case of any clarification or queries. |
ekkarill92 answered 1 year agoRelated Solutions
The accountant for Sunland Corporation has developed the following information for the company's defined-benefit pension plan...
The accountant for Sunland Corporation has developed the
following information for the company's defined-benefit pension
plan for 2019:
Service cost
$540,000
Actual return on plan assets
266,000
Annual contribution to the plan
936,000
Amortization of prior service cost
126,600
Benefits paid to retirees
68,000
Settlement rate
10%
Expected rate of return on plan assets
8%
The accumulated benefit obligation at December 31, 2019, amounted
to $3,330,000.
Using the above information for Sunland Corporation, complete
the pension work sheet for 2019...
Defined Benefit Plan Assignment The following information pertains to Company A's Year 5 defined benefit pension...
Defined Benefit Plan Assignment
The following information pertains to Company A's Year 5 defined
benefit pension plan:
January 1, Year 5, fair value of plan assets $100,000
January 1, Year 5, projected benefit obligation (PBO)
200,000 Contribution to the plan (made on December 31,
Year 5) 10,000 Benefits paid to employees (made on
December 31, Year 5) 15,000 December 31, Year 5, fair
value of plan assets 106,000 Discount
Rate 5% Expected...
At year end, a company has a defined benefit pension plan with a projected benefit obligation...
At year end, a company has a defined benefit pension plan with a
projected benefit obligation of $350,000; a net gain of $140,000
that was not previously recognized in net periodic pension cost;
and prior service cost of $210,000 that was not previously
recognized in net periodic pension cost. What amount should be
reported in accumulated other comprehensive income related to the
company's defined benefit pension plan at year end?
A credit balance of $420,000.
A debit balance of $420,000....
The following information relates to the defined benefit pension plan of the Kraemerica Company. Only a...
The following information relates to the defined benefit pension
plan of the Kraemerica Company. Only a single employee is covered
by the plan. That employee has worked for Kraemerica since 1-1-2014
and she has earned pension benefits since 1-1-2014. Additional
information is provided below.
1) Benefit formula: Upon retirement and upon reaching
age 65, the employee will receive a pension payment annually
(payments to be made as long as employee lives).
The first check will be issued one...
The following information relates to the defined benefit pension plan of the Kraemerica Company. Only a...
The following information relates to the defined benefit pension
plan of the Kraemerica Company. Only a single employee is covered
by the plan. That employee has worked for Kraemerica since 1-1-2014
and she has earned pension benefits since 1-1-2014. Additional
information is provided below.
1) Benefit formula: Upon retirement and upon reaching
age 65, the employee will receive a pension payment annually
(payments to be made as long as employee lives).
The first check will be issued one...
Vaughn Company provides the following information about its defined benefit pension plan for the year 2017....
Vaughn Company provides the following information about its
defined benefit pension plan for the year 2017.
Service cost
$88,500
Contribution to the plan
107,100
Prior service cost amortization
10,600
Actual and expected return on plan assets
63,100
Benefits paid
40,800
Plan assets at January 1, 2017
648,000
Projected benefit obligation at January 1, 2017
688,100
Accumulated OCI (PSC) at January 1, 2017
148,600
Interest/discount (settlement) rate
11
%
Prepare a pension worksheet inserting January 1, 2017, balances,
showing December 31,...
Xyz Company provides the following information about its defined benefit pension plan for the year 2020....
Xyz Company provides the following information about its defined
benefit pension plan for the year 2020.
Service cost
$91,600
Contribution to the plan
104,400
Prior service cost amortization
10,800
Actual and expected return on plan assets
64,600
Benefits paid
40,300
Plan assets at January 1, 2020
650,000
Projected benefit obligation at January 1, 2020
692,000
Accumulated OCI (PSC) at January 1, 2020
150,000
Interest/discount (settlement) rate
11
%
Prepare a pension worksheet inserting January 1, 2020,
balances, showing December 31,...
Pina Company provides the following information about its defined benefit pension plan for the year 2020....
Pina Company provides the following information about its
defined benefit pension plan for the year 2020.
Service cost
$90,900
Contribution to the plan
103,000
Prior service cost amortization
9,300
Actual and expected return on plan assets
63,200
Benefits paid
39,800
Plan assets at January 1, 2020
648,600
Projected benefit obligation at January 1, 2020
706,600
Accumulated OCI (PSC) at January 1, 2020
148,800
Interest/discount (settlement) rate
10
%
Prepare the journal entry recording pension expense.
(Credit account titles are automatically...
Ayayai Company provides the following information about its defined benefit pension plan for the year 2017....
Ayayai Company provides the following information about its
defined benefit pension plan for the year 2017.
Service cost
$91,200
Contribution to the plan
104,700
Prior service cost amortization
9,800
Actual and expected return on plan assets
62,800
Benefits paid
40,500
Plan assets at January 1, 2017
632,600
Projected benefit obligation at January 1, 2017
686,700
Accumulated OCI (PSC) at January 1, 2017
152,100
Interest/discount (settlement) rate
9
%
Requirements:
Using Excel prepare a pension worksheet inserting January 1,
2017, balances,...
Ayayai Company provides the following information about its defined benefit pension plan for the year 2017....
Ayayai Company provides the following information about its
defined benefit pension plan for the year 2017.
Service cost
$91,200
Contribution to the plan
104,700
Prior service cost amortization
9,800
Actual and expected return on plan assets
62,800
Benefits paid
40,500
Plan assets at January 1, 2017
632,600
Projected benefit obligation at January 1, 2017
686,700
Accumulated OCI (PSC) at January 1, 2017
152,100
Interest/discount (settlement) rate
9
%
Requirements:
Using Excel prepare a pension worksheet inserting January 1,
2017, balances,...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What are the advantages and disadvantages of having multiple suppliers for a given medical device component...
- Hal Thomas, a 30-year-old college graduate, wishes to retire at age 65. To supplement other sources...
- Allocation: Fixed and Variable Costs, Budgeted Fixed and Variable Costs Biotechtron, Inc., has two research laboratories...
- Do you think that there is still institutionalized racial discrimination in the United States today and...
- Computer Security Consider a desktop publishing system used to produce documents for various organizations. a. Give...
- Review the discussion question and answer below. Do you agree with the answer? why or why...
- For the assignment you have to do two thing Passing arguments when running the jar or...
ADVERTISEMENT