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2007 - Ch 20 - Ch 20 E20-2(Computation of Pension Expense...

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Ch 20 Service cost 90,000 Interest cost ($800,000 X 10%) 80,000 Actual (and expected) return on plan assets (64,000) Unrecognized prior service cost amortization 10,000 Pension expense for 2011 116,000 E20-3 (Preparation of Pension Worksheet) Using the information in E20-2 prepare a pension worksheet inserting January 1, 2011, balances, showing December 31, 2011, balances, and the journal entry recording pension expense. GENERAL JOURNAL ENTRIES MEMO RECORD PENSION NET PENSION OCI - PRIOR OCI - PENSION PLAN FUNDED CHECK EXPENSE CASH ASSET/(LIABILITY) SERVICE COST GAIN/LOSS PBO ASSETS STATUS ITEMS DR. (CR.) DR./(CR.) DR./(CR.) DR./(CR.) (CR.) DR. Beginning balances (160,000) 150,000 (800,000) 640,000 (160,000) (A) Service Cost 90,000 (90,000) 0 (B) Interest Expense 80,000 (80,000) 0 (C) Expected Return on Assets (64,000) 64,000 0 (D) Amortization of PSC 10,000 (10,000) 0 (E) Contributions (105,000) 105,000 0 (F) Benefits 40,000 (40,000) 0 Journal entry 116,000 (105,000) 95,000 (10,000) 105,000 (1,000) 201000 0 Ending balances (65,000) 140,000 105,000 (930,000) 769,000 (161,000) 19000 Pension Expense 116,000 Cash 105,000 Net Pension Asset/Liability 1,000 OCI - PSC 10,000 Additional Information! Under the corridor approach, suppose the return on Plan assets wasn't 10%, but 25%. PENSION NET PENSION OCI - PRIOR OCI - PENSION PLAN FUNDED EXPENSE CASH ASSET/(LIABILITY) SERVICE COST GAIN/LOSS PBO ASSETS STATUS ITEMS DR. (CR.) DR./(CR.) DR./(CR.) DR./(CR.) (CR.) DR. Beginning balances (160,000) 150,000 (800,000) 640,000 (160,000) (A) Service Cost 90,000 (90,000) (B) Interest Expense 80,000 (80,000) (C) Actual Return on Assets (160,000) 160,000 (D) Amortization of PSC 10,000 (10,000) Gain on Plan Assets 96,000 (96,000) Amortization of Gain on PA (E) Contributions (105,000) 105,000 (F) Benefits 40,000 (40,000)
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