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AC557_Kieso_12th_Edition_Solution_to_Chapter_20_new_FAS_158_Ungraded_Assignments

Intermediate Accounting

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Exercise 20-10 Solution (new FAS 158) (a) Buhl Corp. Pension Worksheet General Journal Entries Memo Record IItems Annual Pension Expense Cash OCI—Prior Service Cost OCI— Gain/Loss Pension Asset/ Liability Projected Benefit Obligation Plan assets Balance, Jan. 1, 2011 145,000 Cr. 625,000 Cr. 480,000 Dr. Service cost 90,000 Dr. 90,000 Cr. Interest cost* 56,250 Dr. 56,250 Cr. Actual return 57,000 Cr. 57,000 Dr. Unexpected gain** 5,000 Dr. 5,000 Cr. Amortization of PSC 19,000 Dr. 19,000 Cr. Liability increase 76,000 Dr. 76,000 Cr. Contributions 99,000 Cr. 99,000 Dr. Benefits 85,000 Dr. 85,000 Cr. Journal entry for 2011 113,250 Dr. 99,000 Cr. 19,000 Cr. 71,000 Dr. 66,250 Cr. Accumulated OCI, Dec. 31, 2011 100,000 Dr 0 Balance, December 31, 2011 81,000 Dr. 71,000 Dr. 211,250 Cr. 762,250 Cr. 551,000 Dr. * $56,250 = $625,000 X .09. **Expected return = $52,000. Unexpected gain = Actual return minus expected return; $5,000 = $57,000 – $52,000. (b) Journal Entry Pension Expense ........................................................ 113,250 Other Comprehensive Income (G/L) .................................... 71,000 Cash ........................................................................... 99,000 Other Comprehensive Income (PSC) ..................... 19,000 Pension Asset /Liability ........................................... 66,250
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EXERCISE 20-13 (new FAS 158) (a) Actual Return = (Ending – Beginning) – (Contributions – Benefits) Fair value of plan assets, December 31, 2011 $2,620 Deduct: Fair value of plan assets, January 1, 2011 1,700
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