3. Presented below is information related to the pension plan of Zimmer Inc. for the year 2018. 1. The service cost related to pension expense is $260,000 using the projected benefits approach. 2. The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $350,000 and $280,000, respectively. The expected return on plan assets is 9% and the settlement rate is 10%. 3. The accumulated OCI – prior service cost at the beginning of the year is $140,000. The company has a workforce of 200 employees, all who are expected to receive benefits under the plan. The total number of service- years is 1,000 and the service-years attributable to 2018 is 200. The company has decided to use the years-of-service method of amortization for these costs. At the beginning of the period, the fair value of pension plan assets was $280,000. The company had an Accumulated OCI (loss) at the beginning of the period of $90,000. Any amortization of unrecognized net loss is recognized on a straight-line basis over the average remaining service-life of the employees. 5. The contribution made to the pension fund in 2018 was $229,000. Instructions (a) Determine the pension expense to be reported on the income statement for 2018. (Round all computations to nearest dollar.) (b) Prepare the journal entry(ies) to record pension expense for 2018.
3. Presented below is information related to the pension plan of Zimmer Inc. for the year 2018. 1. The service cost related to pension expense is $260,000 using the projected benefits approach. 2. The projected benefit obligation and the accumulated benefit obligation at the beginning of the year are $350,000 and $280,000, respectively. The expected return on plan assets is 9% and the settlement rate is 10%. 3. The accumulated OCI – prior service cost at the beginning of the year is $140,000. The company has a workforce of 200 employees, all who are expected to receive benefits under the plan. The total number of service- years is 1,000 and the service-years attributable to 2018 is 200. The company has decided to use the years-of-service method of amortization for these costs. At the beginning of the period, the fair value of pension plan assets was $280,000. The company had an Accumulated OCI (loss) at the beginning of the period of $90,000. Any amortization of unrecognized net loss is recognized on a straight-line basis over the average remaining service-life of the employees. 5. The contribution made to the pension fund in 2018 was $229,000. Instructions (a) Determine the pension expense to be reported on the income statement for 2018. (Round all computations to nearest dollar.) (b) Prepare the journal entry(ies) to record pension expense for 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:3. Presented below is information related to the pension plan of Zimmer Inc.
for the year 2018.
1. The service cost related to pension expense is $260,000 using the
projected benefits approach.
2. The projected benefit obligation and the accumulated benefit obligation at
the beginning of the year are $350,000 and $280,000, respectively. The
expected return on plan assets is 9% and the settlement rate is 10%.
3. The accumulated OCI – prior service cost at the beginning of the year is
$140,000. The company has a workforce of 200 employees, all who are
expected to receive benefits under the plan. The total number of service-
years is 1,000 and the service-years attributable to 2018 is 200. The company
has decided to use the years-of-service method of amortization for these
costs.
At the beginning of the period, the fair value of pension plan assets was
$280,000. The company had an Accumulated OCI (loss) at the beginning of
the period of $90,000. Any amortization of unrecognized net loss is
recognized on a straight-line basis over the average remaining service-life of
the employees.
5. The contribution made to the pension fund in 2018 was $229,000.
Instructions
(a) Determine the pension expense to be reported on the income statement
for 2018. (Round all computations to nearest dollar.)
(b) Prepare the journal entry(ies) to record pension expense for 2018.
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