Student Notes, Pensions(17)

Fo r e a c h tra ns a c tio n o r e ve nt the de b

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Unformatted text preview: Fo r e a c h tra ns a c tio n o r e ve nt, the de b its m us t e q ua l the c re dits (if the y do n’t, yo u’ll m e s s up). Chapter 20-17 The following defined pension data of Doreen Corp. apply to the year 2011. Using a Pension Worksheet Using a Pension Worksheet Using a Pension Worksheet Using a Pension Worksheet Pro je c te d b e ne fit o blig a tio n, 1/1/11 (be fo re a m e ndm e nt) $560,000 Pla n a s s e ts , 1/1/11 546,200 Pe ns io n liab ility 13,800 O n Ja nuary 1, 2011, Do re e n C o rp., thro ug h pla n a m e ndm e nt, g rants prio r s e rvic e be ne fits ha ving a pre s e nt va lue o f 100,000 S e ttle m e nt rate 9% S e rvic e c o s t 58,000 C o ntrib utio ns (funding ) 55,000 Ac tua l (e xpe c te d) re turn o n plan a s s e ts 52,280 Be ne fits pa id to re tire e s 40,000 Prio r s e rvic e am o rtizatio n fo r 2011 17,000 Instructions: Fo r 2011, pre pa re a pe ns io n wo rks he e t fo r Do re e n C o rp. tha t s ho ws the jo urnal e ntry fo r pe ns io n e xpe ns e . Chapter 20-18 GENERAL JOURNAL ENTRI ES MEMO RECORD Prior Pension Project ed Pension Service Gain/ Asset / Benef it Plan I t ems Expense Cash Costs Loss Liabilit y Obligat ion Assets Dec. 31, 2010 Prior service cost s Adj.bal. 1/ 1/ 11 Service cost I nt erest cost Act ual ret urn Amort . of PSC Contributions Benef it s paid Journal ent ry AOCI 12/ 31/ 10 Dec. 31, 2011 OCI Using a Pension Worksheet Using a Pension Worksheet Using a Pension Worksheet Using a Pension Worksheet Chapter 20-19 C o m pa ny s ho uld no t re c o g nize the re tro a c tive b e ne fits a s pe ns io n e xpe ns e e ntire ly in the ye a r o f a m e ndm e nt. Em plo ye r s ho uld re c o g nize the pe ns io n e xpe ns e o ve r the re m a ining s e rvic e live s o f the e m plo ye e s who a re e xpe c te d to b e ne fit fro m the c ha ng e in the pla n. Prior Service Costs Prior Service Costs Prior Service Costs Prior Service Costs Amortization Method: Board prefers a years-of-service method. ASC 715 allows use of the straight-line method (almost all use straight-line method). Chapter 20-20 Companies combine the liability gains and losses in the s a m e Other Comprehensive Income a c c o unt us e d fo r asset gains and losses (a nd a ls o PS C ) The y a c c um ula te the a s s e t a nd lia b ility g a ins a nd lo s s e s fro m ye a r to ye a r tha t a re no t a m o rtize d in Accumulated Other Comprehensive Income . This a m o unt is re po rte d o n the b a la nc e s he e t in the s to c kho lde rs ’ e q uity s e c tio n....
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Fo r e a c h tra ns a c tio n o r e ve nt the de b its m us...

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