Chp 20 12th ed Exercises and Problems Solutions

Chp 20 12th ed Exercises and Problems Solutions - EXERCISE...

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EXERCISE 20-1 (5–10 minutes) (a) Computation of pension expense: Service cost. ...................................................... $ 60,000 Interest cost ($500,000 X .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 Pension Asset /Liability. ................................... 3,000 Other Comprehensive Income (PSC). ............. 8,000 EXERCISE 20-2 (10–15 minutes) 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
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XERCISE 20-3 (15–25 minutes) 20-14 Rebekah Company Pension Worksheet—2011 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
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EXERCISE 20-8 (20–25 minutes) Corridor and Minimum Loss Amortization Year Projected Benefit Obligation (a) Plan Assets 10% Corridor Accumulated OCI (G/L) (a) Minimum Amortization of Loss 2009 $2,000,000 $1,900,000 $200,000 $ 0 $ 0 2010 2,400,000 2,500,000 250,000 280,000 3,000 (b) 2011 2,900,000 2,600,000 290,000 367,000 (c) 6,417 (d) 2012 3,600,000 3,000,000 360,000 370,583 (e) 882 (f) (a) As of the beginning of the year. (b)
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This note was uploaded on 11/30/2010 for the course BUSINESS 4230 taught by Professor Dee during the Spring '10 term at Community College of Denver.

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Chp 20 12th ed Exercises and Problems Solutions - EXERCISE...

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