group project 1

group project 1 - Actual return(389,000 389,000 Unexpected...

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Name: Gretchen Quinche, Janet Rivera, Liridona Sheholli Exercise: Group Test # 1 Problem # 3 Course: Acct 430 - 60 Date: 28-Sep-11 1) The following defined pension data of Tommy Corp. apply to the year 2010. Projected benefit obligation, 1/1/10 (before amendment) $6,500,000 Plan assets, 1/1/10 6,280,000 525,000 Settlement rate 8% Service cost 425,000 Contributions (funding) 535,000 Actual (expected) return on plan assets 389,000 Benefits paid to retirees 511,000 Average service life of all covered employees in years 15 amortization of prior service cost Prior Service Cost: $525,000 Average remaining service 15 Amortization 35,000 TOMMY CORP. Pension Work Sheet—2010 General Journal Entries Memo Record Items Cash Balance, January 1, 2009 (6,500,000) 6,500,000 Prior service cost 525,000 (525,000) New balance, January 1, 2010 (7,025,000) 6,500,000 Service cost 425,000 (425,000) Interest cost 562,000 (562,000)
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Unformatted text preview: Actual return (389,000) 389,000 Unexpected Loss (113,400) 113,400 Amortization of PSC 35,000 (35,000) Contributions (535,000) 535,000 Benefits 511,000 (511,000) Journal Entry 2010 519,600 (535,000) 490,000 113,400 (588,000) Accumulated OCI, December 31, 2009 Balance, December 31, 2010 490,000 113,400 (588,000) (7,501,000) 6,913,000 Interest cost = $7,025,000 x 8 % = 562,000 Unexpected loss = $6,280,000 x 8% = 502,400 - 389,000 = 113,400 2) Journal Entry 2010 Pension Expense 519,600 Other Comperhensive Income (PSC) 490,000 Other Comperhensive Income (G/L) 113,400 Cash 535,000 Pension Asset/Liability 588,000 On January 1, 2010, through plan amendment, grants prior service benefits having a present value of Annual Pension Expense OCI - Prior Service Cost OCI - Gains and loss Pension Asset/ Liability Projected Benefit Obligation Plan Assets...
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This note was uploaded on 11/26/2011 for the course ADV ACCT 430 taught by Professor Xu during the Spring '11 term at WPUNJ.

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