/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} E20-3 Using the information in E20-2, ... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 20: E20-3 (page 1163)

Using the information in E20-2, prepare a pension worksheet inserting January 1, 2017, balances, showing December 31, 2017, balances, and the journal entry recording pension expense.

Short Answer

Expert verified

A pension Worksheet is the kind of pension statement which includes all of the organization's necessary information related to the defined benefit pension plans. This worksheet recordsthe pension expense entries in the journal book.

Step by step solution

01

Computation of Pension Worksheet as of January 1, 2017.

Veldre Company
Pension Worksheet for the year 2017
General Journal Entries
Memo Record

Particulars

Annual pension expense

Cash

OCI prior service cost

Pension asset/liability

Projected benefit obligation

Plan Assets

Balance Jan 1, 2017

$60,000 Cr.

$700,000 Cr.

$640,000 Dr.

Service cost

$90,000 Dr.

$90,000 Cr.

Interest cost

$700,000脳10%

$70,000 Dr.

$70,000 Cr.

Actual return

$64,000 Cr.

$64,000 Dr.

Amortization of PSC

$10,000 Dr.

$10,000 Cr.

Contributions

$105,000 Cr.

$105,0000 Dr.

Benefits

$40,000 Dr.

$40,000 Cr.

Journal entry for 2017

$106,000 Dr.

$105,000 Cr.

$10,000 Cr.

$9,000 Dr.

Accumulated OCI Dec 31, 2016

$150,000 Dr.

Balance Dec 31, 2017

$140,000 Dr.

$1,000 Cr.

$820,000 Cr.

$769,000 Dr.

02

Journal entry for recording the transaction of pension expense for the year 2017.

Veldre Company
Journal Entry

Date

Particulars

Debit

Credit

2017

Pension Expense

$106,000

Pension Asset/Liability

$9,000

Other comprehensive income

$10,000

Cash

$105,000

(To record the pension expense)

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

For Warren Corporation, year-end plan assets were \(2,000,000. At the beginning of the year, plan assets were \)1,780,000. During the year, contributions to the pension fund were \(120,000, and benefits paid were \)200,000. Compute Warren鈥檚 actual return on plan assets.

Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018. 2017 2018 Projected benefi t obligation, January 1 \(600,000 Plan assets (fair value and market-related value), January 1 410,000 Pension asset/liability, January 1 190,000 Cr. Prior service cost, January 1 160,000 Service cost 40,000 \) 59,000 Settlement rate 10% 10% Expected rate of return 10% 10% Actual return on plan assets 36,000 61,000 Amortization of prior service cost 70,000 50,000 Annual contributions 97,000 81,000 Benefits paid retirees 31,500 54,000 Increase in projected benefi t obligation due to changes in actuarial assumptions 87,000 鈥�0鈥� Accumulated benefi t obligation at December 31 721,800 789,000 Average service life of all employees 20 years Vested benefi t obligation at December 31 464,000 Instructions (a) Prepare a pension worksheet presenting both years 2017 and 2018 and accompanying computations and amortization of the loss (2018) using the corridor approach. (b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year. (c) For 2018, indicate the pension amounts reported in the financial statements.

What is the difference between the APBO and the EPBO? What are the components of post-retirement expense?

Erickson Company sponsors a defined benefit pension plan. The corporation鈥檚 actuary provides the following information about the plan. January 1, December 31, 2017 2017 Vested benefit obligation \(1,500 \)1,900 Accumulated benefit obligation 1,900 2,730 Projected benefit obligation 2,500 3,300 Plan assets (fair value) 1,700 2,620 Settlement rate and expected rate of return 10% Pension asset/liability 800 ? Service cost for the year 2017 400 Contributions (funding in 2017) 700 Benefits paid in 2017 200 Instructions (a) Compute the actual return on the plan assets in 2017. (b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2017. (Assume the January 1, 2017, balance was zero.) (c) Compute the amount of net gain or loss amortization for 2017 (corridor approach). (d) Compute pension expense for 2017.

Gottschalk Company sponsors a defined benefit plan for its 100 employees. On January 1, 2017, the company鈥檚 actuary provided the following information. Accumulated other comprehensive loss (PSC) \(150,000 Pension plan assets (fair value and market-related asset value) 200,000 Accumulated benefit obligation 260,000 Projected benefit obligation 380,000 The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2017, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to \)52,000; the projected benefit obligation was \(490,000; fair value of pension assets was \)276,000; the accumulated benefit obligation amounted to \(365,000. The expected return on plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is \)11,000. The company鈥檚 current year鈥檚 contribution to the pension plan amounted to $65,000. No benefits were paid during the year. Instructions (a) Determine the components of pension expense that the company would recognize in 2017. (With only one year involved, you need not prepare a worksheet.) (b) Prepare the journal entry to record the pension expense and the company鈥檚 funding of the pension plan in 2017. (c) Compute the amount of the 2017 increase/decrease in gains or losses and the amount to be amortized in 2017 and 2018. (d) Indicate the pension amounts reported in the financial statement as of December 31, 2017.
See all solutions

Recommended explanations on Business Studies Textbooks

Business Data Analytics

Read Explanation

Startups

Read Explanation

Introduction to Business

Read Explanation

Accounting

Read Explanation

Operational Management

Read Explanation

Insurance

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.