Question

In: Accounting

Problem 17-12 Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] The...

Problem 17-12 Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8]

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2018 and 2019 are presented below ($ in millions):

Information Provided by Pension Plan Actuary:

Projected benefit obligation as of December 31, 2017 = $1,850.

Prior service cost from plan amendment on January 2, 2018 = $550 (straight-line amortization for 10-year average remaining service period).

Service cost for 2018 = $550.

Service cost for 2019 = $600.

Discount rate used by actuary on projected benefit obligation for 2018 and 2019 = 10%.

Payments to retirees in 2018 = $410.

Payments to retirees in 2019 = $480.

No changes in actuarial assumptions or estimates.

Net gain—AOCI on January 1, 2018 = $245.

Net gains and losses are amortized for 10 years in 2018 and 2019.


Information Provided by Pension Fund Trustee:

Plan asset balance at fair value on January 1, 2018 = $1,400.

2018 contributions = $570.

2019 contributions = $620.

Expected long-term rate of return on plan assets = 12%.

2018 actual return on plan assets = $120.

2019 actual return on plan assets = $170.


Required:

1. Calculate pension expense for 2018 and 2019.
2. Prepare the journal entries for 2018 and 2019 to record pension expense.
3. Prepare the journal entries for 2018 and 2019 to record any gains and losses and new prior service cost.
4. Prepare the journal entries for 2018 and 2019 to record the cash contribution to plan assets and benefit payments to retirees.

Solutions

Expert Solution


Related Solutions

Problem 17-12 Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] The...
Problem 17-12 Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2018 and 2019 are presented below ($ in millions): Information Provided by Pension Plan Actuary: Projected benefit obligation as of December 31, 2017 = $3,950. Prior service cost from plan amendment on January 2, 2018 = $850 (straight-line amortization for 10-year average remaining service period). Service cost for 2018 =...
Problem 17-6 Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries...
Problem 17-6 Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2018. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. A consulting firm, engaged as actuary, recommends 6% as the appropriate discount rate. The service cost is $250,000 for 2018 and $360,000...
Problem 17-6 Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries...
Problem 17-6 Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2018. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2018 and 2019.* A consulting firm, engaged as actuary, recommends 4% as the appropriate discount...
Exercise 17-11 (Static) Components of pension expense; journal entries [LO17-6, 17-7] Pension data for Barry Financial...
Exercise 17-11 (Static) Components of pension expense; journal entries [LO17-6, 17-7] Pension data for Barry Financial Services Inc. include the following: ($ in thousands) Discount rate, 7% Expected return on plan assets, 10% Actual return on plan assets, 9% Service cost, 2021 $ 310 January 1, 2021: Projected benefit obligation 2,300 Accumulated benefit obligation 2,000 Plan assets (fair value) 2,400 Prior service cost—AOCI (2021 amortization, $25) 325 Net gain—AOCI (2021 amortization, $6) 330 There were no changes in actuarial assumptions....
Exercise 17-19 (Algo) Record pension expense, funding, and gains and losses; determine account balances [LO17-6, 17-7,...
Exercise 17-19 (Algo) Record pension expense, funding, and gains and losses; determine account balances [LO17-6, 17-7, 17-8] Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available: Projected Benefit Obligation ($ in millions) Balance, January 1, 2021 $ 520 Service cost 54 Interest cost, discount rate, 5% 26 Gain due to changes in actuarial assumptions in 2021 (10 ) Pension benefits paid (26 ) Balance,...
Problem 17-16 (Static) Comprehensive—reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3,...
Problem 17-16 (Static) Comprehensive—reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] Skip to question [The following information applies to the questions displayed below.] Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2019 (amortization: $4 million per year) $ 32 million Net loss-pensions at Jan.1, 2021...
Problem 17-16 (Static) Comprehensive—reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3,...
Problem 17-16 (Static) Comprehensive—reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] Skip to question [The following information applies to the questions displayed below.] Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2019 (amortization: $4 million per year) $ 32 million Net loss-pensions at Jan.1, 2021...
Problem 17-16 (Static) Comprehensive—reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3,...
Problem 17-16 (Static) Comprehensive—reporting a pension plan; pension spreadsheet; determine changes in balances; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8] Skip to question [The following information applies to the questions displayed below.] Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2021: Prior service cost at Jan. 1, 2021, from plan amendment at the beginning of 2019 (amortization: $4 million per year) $ 32 million Net loss-pensions at Jan.1, 2021...
x 2 8 5 9 4 3 9 6 7 8 y 3 6 5 7...
x 2 8 5 9 4 3 9 6 7 8 y 3 6 5 7 9 7 4 6 9 9 -5.48x + 0.17 5.48x + 0.17 -0.17x + 5.48 0.17x + 5.48
3, 7, 8, 5, 6, 4, 9, 10, 7, 8, 6, 5 Using the previous question...
3, 7, 8, 5, 6, 4, 9, 10, 7, 8, 6, 5 Using the previous question 's scores, If three points were added to every score in this distribution, what would be the new mean? If three points were added to every score in this distribution, what would be the new standard deviation. Remember, you have already calculated population standard deviation in a previous problem. This problem requires two answers.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT