Question
In: Accounting
Exercise 20-7 The following defined pension data of Teal Corp. apply to the year 2017. Projected...
Exercise 20-7
The following defined pension data of Teal Corp. apply to the year 2017.
| Projected benefit obligation, 1/1/17 (before amendment) | $538,000 | ||
| Plan assets, 1/1/17 | 525,000 | ||
| Pension liability | 13,000 | ||
| On January 1, 2017, Teal Corp., through plan amendment, grants prior service benefits having a present value of |
119,000 | ||
| Settlement rate | 9 | % | |
| Service cost | 62,100 | ||
| Contributions (funding) | 67,100 | ||
| Actual (expected) return on plan assets | 52,100 | ||
| Benefits paid to retirees | 42,000 | ||
| Prior service cost amortization for 2017 | 18,600 |
For 2017, prepare a pension worksheet for Teal Corp. that shows the
journal entry for pension expense and the year-end balances in the
related pension accounts. (Enter all amounts as
positive.) Please include credit or debit
|
TEAL CORP. |
|||||||||||||||||||
|
General Journal Entries |
Memo Record |
||||||||||||||||||
|
Items |
Annual Pension |
Cash |
OCI–Prior |
Pension |
Projected Benefit |
Plan |
|||||||||||||
| Balance, Dec. 31, 2016 | $ | ||||||||||||||||||
| Prior service cost | |||||||||||||||||||
| Balance, Jan. 1, 2017 | |||||||||||||||||||
| Service cost | |||||||||||||||||||
| Interest cost | |||||||||||||||||||
| Actual return | |||||||||||||||||||
| Amortization of PSC | |||||||||||||||||||
| Contributions | |||||||||||||||||||
| Benefits | |||||||||||||||||||
| Journal entry for 2017 | $ | ||||||||||||||||||
| Accumulated OCI, Dec. 31, 2016 |
. |
||||||||||||||||||
| Balance, Dec. 31, 2017 | |||||||||||||||||||
Solutions
Expert Solution
Pension worksheet reveals the movement of pension around different items. It reveals what resulted in the increase or decrease in pension asset/liability .
Teal corp
Pension worksheet
|
General journal entries |
memo record |
||||||
|
Annual Pension |
Cash |
Prior service |
Gain/Loss |
Pension Asset/ |
Projected |
Plan |
|
|
Dec 31, 2016 balance |
-13000 |
-538000 |
525000 |
||||
|
prior service cost |
119000 |
-119000 |
|||||
|
balance Jan 1,2017 |
-657000 |
525000 |
|||||
|
Service cost |
62100 |
-62100 |
|||||
|
interest cost (657000*9%) |
59130 |
-59130 |
|||||
|
actual return |
-52100 |
52100 |
|||||
|
amortization of PSC |
18600 |
-18600 |
|||||
|
contributions |
-67100 |
67100 |
|||||
|
benefits |
42000 |
-42000 |
|||||
|
journal entry for 2017 |
87730 |
-67100 |
100400 |
-121030 |
|||
|
Accumulated OCI, dec 31,2016 |
|||||||
|
Balance dec 31,2017 |
100400 |
-121030 |
-736230 |
602200 |
The required journal entry would be
|
Date |
Particulars |
Debit ($) |
Credit ($) |
|
Pension expense |
87730 |
||
|
Other comprehensive income (PSC) |
100400 |
||
|
Pension Asset/Liability (Bal fig) |
121030 |
||
|
Cash |
67100 |
ekkarill92 answered 1 year agoRelated Solutions
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