Question
In: Accounting
51.The information regarding the company pension plan in 2017 for What’s My Name Company is as...
51.The information regarding the company pension plan in 2017 for
What’s My Name Company is as follows:
Plan Assets at January 1,
2017 $450,000
Projected Benefit Obligations (before
amendment) $500,000
On January 1, 2017, the company, through plan amendment, grants prior service benefits having a present value of $150,000
Service
Costs $80,000
Actual/expected return on plan
assets $55,000
Prior service cost
amortization $20,000
Contributions to the
plan $90,000
Benefits paid
$60,000
Interest/discount (settlement) rate: 10%
What is the balance of OCI - Prior Service Cost at the end of
2017?
Select one:
a. $110,000
b. $90,000
c. $130,000
d:$150000
43.Lakeside owns equipment that cost $139,000 and has a useful life
of 10 years with no salvage value. On January 1, 2018, Larkspur
leases the equipment to Morgan Corporation for one year with a
rental payment of $16,800 on January 1 and a rental payment of
$16,800 on July 1.
How much Rent Revenue would Lakeside recognize in 2018?
Select one:
a. $16,800
b. $33,600
c. $13,900
d. $19,700
Solutions
Expert Solution
51) The balance of OCI - Prior Service Cost at the end of 2017 is $130,000(Option C)
| Pension Worksheet 2017 | ||||||||
| Items | Annual Pension Expense | Cash | OCI-Prior Service Cost | OCI-Gain/(Loss) | Pension Asset/liability | Projected benefit obligation | Plan Asset | |
| Balance, Jan 1,2017 | $ - | $ - | $ - | $ (100) | $ (50,000) | $ (500,000) | $ 450,000 | |
| Past Service Cost created | $ - | $ - | $ 150,000 | $ - | $ - | $ (150,000) | $ - | |
| Service Cost | $ 80,000 | $ - | $ - | $ - | $ (80,000) | $ - | ||
| Interest Cost | $ 50,000 | $ - | $ - | $ - | $ (50,000) | $ - | ||
| Actual return | $ (55,000) | $ - | $ - | $ - | $ - | $ 55,000 | ||
| Unexpected gain/ loss | $ - | $ - | $ - | $ - | $ - | $ - | ||
| Amortisation of PSC | $ 20,000 | $ - | $ (20,000) | $ - | $ - | $ - | ||
| Amortisation of OCI-Gain/loss | $ - | $ - | $ - | $ - | $ - | $ - | ||
| Liability (increases)/decreases | $ - | $ - | $ (350) | $ - | $ (350) | |||
| Contributions | $ - | $ (90,000) | $ - | $ - | $ - | $ 90,000 | ||
| Benefits | $ - | $ - | $ - | $ - | $ 60,000 | $ (60,000) | ||
| $ - | $ - | $ - | $ - | $ - | $ - | |||
| Journal entry for 2017 | $ 95,000 | $ (90,000) | $ 130,000 | $ (350) | $ (135,350) | $ (220,350) | $ 85,000 | |
| Accumulated OCI dec 31, 2017 | $ - | $ - | $ - | $ (100) | $ - | $ - | $ - | |
| Balance, December 31, 2017 | $ - | $ - | $ 130,000 | $ (450) | $ (185,350) | $ (720,350) | $ 535,000 |
| Year 2017 | ||||
| 1 | Pension Expense | $ 95,000 | ||
| 2 | Journal entry | |||
| Account title & Explaination | 2017 | |||
| Debit | Credit | |||
| Annual pension expense | 95,000 | |||
| OCI-Prior Service Cost | 130,000 | |||
| OCI-(Gain/Loss) | 350 | |||
| Cash | 90,000 | |||
| Net Pension Asset/liability | 135,350 | |||
| (To record pension expense and remeasurement loss recorded) |
43) Rent Revenue would Lakeside recognize in 2018 is 16800+16800=$33,600(Option b)
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