Question
In: Accounting
Exercise 20-23 Pronghorn Co. provides the following information about its postretirement benefit plan for the year...
Exercise 20-23
Pronghorn Co. provides the following information about its postretirement benefit plan for the year 2017.
|
Service cost |
$89,900 |
||
|
Prior service cost amortization |
3,100 |
||
|
Contribution to the plan |
51,500 |
||
|
Actual and expected return on plan assets |
57,900 |
||
|
Benefits paid |
43,400 |
||
|
Plan assets at January 1, 2017 |
714,600 |
||
|
Accumulated postretirement benefit obligation at January 1, 2017 |
750,400 |
||
|
Accumulated OCI (PSC) at January 1, 2017 |
102,300 |
Dr. |
|
|
Discount rate |
9 |
% |
Prepare a worksheet inserting January 1, 2017, balances, showing
December 31, 2017, balances, and the journal entry recording
postretirement benefit expense. (Enter all amounts as
positive.)
|
PRONGHORN CO. |
||||||||||||||||||
|
General Journal Entries |
Memo Record |
|||||||||||||||||
|
Items |
Annual Postretirement |
Cash |
OCI—Prior |
Postretirement Asset/ |
APBO |
Plan Assets |
||||||||||||
|
Balance, Jan. 1, 2017 |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
||||||
|
Service cost |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||
|
Interest cost |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||
|
Actual return |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||
|
Contributions |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||
|
Benefits |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||
|
Amortization of PSC |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||
|
Journal entry for 2017 |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||
|
Accumulated OCI, Dec. 31, 2016 |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
Dr.Cr. |
||||||||||||||
|
Balance, Dec. 31, 2017 |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
$ |
Dr.Cr. |
||||||||||
Solutions
Expert Solution
| Pronghorn Co. | ||||||||||||
| Postretirement Benefit Worksheet—2017 | ||||||||||||
| General Journal Entries | Memo Record | |||||||||||
| Items | Annual Postretirement | Cash | OCI—Prior | Postretirement Asset/ | APBO | Plan Assets | ||||||
| Expense | Service Cost | Liability | ||||||||||
| Balance, Jan. 1, 2017 | $ | $ | $ | 35800 | Cr. | 750400 | Cr. | 714600 | Dr. | |||
| Service cost | 89900 | Dr. | 89900 | Cr. | ||||||||
| Interest cost | 67536 | Dr. | 67536 | Cr. | ||||||||
| Actual return | 57900 | Cr. | 57900 | Dr. | ||||||||
| Contributions | 51500 | Cr | 51500 | Dr. | ||||||||
| Benefits | 43400 | Dr. | 43400 | Cr. | ||||||||
| Amortization of PSC | 3100 | Dr. | 3100 | Cr. | ||||||||
| Journal entry for 2017 | 102636 | Dr. | 51500 | Cr. | 3100 | Cr. | 48036 | Cr. | ||||
| Accumulated OCI, Dec. 31, 2016 | 102300 | Dr. | ||||||||||
| Balance, Dec. 31, 2017 | 99200 | Dr. | 83836 | Cr. | 864436 | Cr. | 780600 | Dr. | ||||
| Service Cost | 89900 |
| Interest on Accumu lated Posstretirement Benfit Obligation (9%* $750400) | 67536 |
| Expected Return on Plan Asset | -57900 |
| Amortisation of Prior Service Cost | 3100 |
| Post Retirement Expense | 102636 |
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Benefits paid
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Contribution to the plan
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Actual and
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Contribution to the plan 56,000
Actual and expected return on plan assets 62,000
Benefits paid 40,000
Plan assets at January 1, 2017 710,000
Accumulated postretirement benefit obligation
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Contribution to the plan 106,900
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Actual and expected return on plan assets 63,500
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Plan assets at January 1, 2017 642,500
Projected benefit obligation at January 1, 2017 707,800
Accumulated OCI (PSC) at January 1, 2017 152,900
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Actual return on plan assets
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Benefits paid
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Net defined benefit liability at January 1, 2020
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Contribution to the plan
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Actual return on plan assets
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Benefits paid
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Net defined benefit liability at January 1, 2020
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Plan assets at January 1, 2020
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Defined benefit obligation at January 1, 2020
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Actual and expected return on plan assets
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Benefits paid
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