In: Accounting
chapter 10-17
instructions
Yuri Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Funds, by the fifteenth of the month following the end of each quarter. Assume that the pension cost is $350,000 for the quarter ended December 31.
Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
a. Journalize the entries to record the accrued pension liability on December 31 (on page 11 of the journal) and the payment to the funding agent on January 15 (on page 12 of the journal). Refer to the Chart of Accounts for exact wording of account titles. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
b. How does a defined
contribution plan differ from a defined benefit
plan?
a. Journalize the entries to record the accrued pension liability on December 31 (on page 11 of the journal) and the payment to the funding agent on January 15 (on page 12 of the journal). Refer to the Chart of Accounts for exact wording of account titles. PAGE 11 JOURNAL ACCOUNTING EQUATION
PAGE 12 JOURNAL ACCOUNTING EQUATION
|
On page 11
ACCOUNTING EQUATION |
||||||||
DATE |
DESCRIPTION |
POST. REF. |
DEBIT |
CREDIT |
ASSETS |
LIABILITIES |
EQUITY |
|
1 |
31-Dec |
Pension Expense a/c Dr To Unfunded Pension liabiltiy a/c Cr |
537 227 |
$350,000 |
$350,000 |
$350,000 |
($350,000) |
|
2 |
on page 12
ACCOUNTING EQUATION |
||||||||
DATE |
DESCRIPTION |
POST. REF. |
DEBIT |
CREDIT |
ASSETS |
LIABILITIES |
EQUITY |
|
1 |
15-Jan |
Unfunded Pension liabiltiy a/c Dr To Cash a/c Cr |
227 110 |
$350,000 |
$350,000 |
($350,000) |
($350,000) |
|
2 |