PEN-1+Problem

PEN-1+Problem - plan. In 2005, Springsteen paid cash to the...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
PEN-1: Pension Accounting – Defined Contribution Plan Springsteen Company has four professional employees that are covered by a defined contribution pension plan. The pension plan states that contributions equal to 10% of the employee’s annual salaries are to be paid in cash to the mutual fund chosen by the employee. In 2004, the employees’ salaries are as follows: Patti $ 75,000 Clarence 100,000 Danny 80,000 Max 65,000 Employees are expected to receive a 5% raise in both 2005 and 2006. In 2004, Springsteen paid cash to the mutual funds equal to its obligation under the terms of the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: plan. In 2005, Springsteen paid cash to the mutual funds equal to only 95% of its obligation. In 2006, Springsteen paid the remainder of its 2005 obligation and 110% of its obligation for 2006. Required: (1) Determine Springsteen’s obligation under the pension plan for 2004, 2005, and 2006. (2) Prepare the journal entries that Springsteen would make in 2004, 2005, and 2006 related to its pension plan. (3) What amounts would be shown as assets and liabilities related to the pension plan on the balance sheets at 12/31/04, 12/31/05, and 12/31/06?...
View Full Document

This note was uploaded on 07/28/2011 for the course BUS-A 311 taught by Professor Oler during the Spring '09 term at Indiana.

Ask a homework question - tutors are online