Chapter 20 solutions to exercises and problems

Chapter 20 solutions to exercises and problems - EXERCISE...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: EXERCISE 20-1 (a) Computation of pension expense: Service cost $ 60,000 Interest cost ($500,000 X 0.10) 50,000 Expected return on plan assets (12,000) Prior service cost amortization 8,000 Pension expense for 2010 $106,000 (b) Pension Expense.................................................................. 106,000 Cash............................................................................ 95,000 OCI (PSC)... 8,000 Pension Asset /Liability.............................................. 3,000 EXERCISE 20-2 Computation of pension expense: Service cost $ 90,000 Interest cost ($800,000 X 10%) 80,000 Expected return on plan assets (64,000) Prior service cost amortization 10,000 Pension expense for 2011 $116,000 20-1 EXERCISE 20-3 20-14 Rebekah Company Pension Worksheet2011 General Journal Entries Memo Record Items Annual Pension Expense Cash OCI Prior Service Cost Pension Asset/Liability Projected Benefit Obligation Plan Assets Balance, January 1, 2011 160,000 Cr. 800,000 Cr. 640,000 Dr. Service cost 90,000 Dr. 90,000 Cr. Interest cost* 80,000 Dr. 80,000 Cr. Actual return** 64,000 Cr. 64,000 Dr. Amortization of PSC 10,000 Dr. 10,000 Cr. Contributions 105,000 Cr. 105,000 Dr. Benefits 40,000 Dr. 40,000 Cr. Journal entry for 2011*** 116,000 Dr. 105,000 Cr. 10,000 Cr. 1,000 Cr. Accumulated OCI, Dec. 31, 2010 150,000 Dr. Balance, Dec. 31, 2011 140,000 Dr. 161,000 Cr. 930,000 Cr. 769,000 Dr. *$80,000 = $800,000 X 10%. **Note: We show actual return on the worksheet to ensure that plan assets are properly reported. If expected and actual return differ, then an additional adjustment is made to compute the proper amount of pension expense. ***Pension Expense 116,000 Other Comprehensive Income (PSC) 10,000 Cash 105,000 Pension Asset/Liability 1,000 EXERCISE 20-4 20-15 Trudy Borke Inc. Pension Worksheet2011 General Journal Entries Memo Record Items Annual Pension Expense Cash Pension Asset / Liability Projected Benefit Obligation Plan Assets Balance, January 1, 2011 490,000 Cr. 490,000 Dr. Service cost 40,000 Dr. 40,000 Cr. Interest cost* 41,650 Dr. 41,650 Cr. Actual return** 49,700 Cr. 49,700 Dr. Contributions 30,000 Cr. 30,000 Dr. Benefits 33,400 Dr. 33,400 Cr. Journal entry, December 31 31,950 Dr. 30,000 Cr. 1,950 Cr. Balance, December 31, 2011 1,950 Cr. 538,250 Cr. 536,300 Dr. *$41,650 = $490,000 X 0.085. **Note: We show actual return on the worksheet to ensure that plan assets are properly reported. If expected and actual returns differ, then an additional adjustment is made to compute the proper amount of pension expense. EXERCISE 20-5 Computation of Service-Years Year Ed Paul Mary Dave Caroline Total 2011 1 1 1 1 1 5 2012 1 1 1 1 1 5 2013 1 1 1 1 1 5 2014 1 1 1 1 4 2015 1 1 1 3 2016 1 1 1 3 3 4 6 6 6 25 Cost per service-year: $60,000 25 = $2,400 Computation of Annual Prior Service Cost Amortization Year Total Service- Years Cost Per Service- Year Annual Amortization 2011 5 $2,400 $12,000 2012 5 2,400...
View Full Document

Page1 / 18

Chapter 20 solutions to exercises and problems - EXERCISE...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online