FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Blossom Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan. Plan assets (market-related value) $480,000 Projected benefit obligation 650,000 Pension asset/liability 170,000 Cr. Prior service cost 80,000 Net gain or loss (debit) 85,000 As a result of the operation of the plan during 2020, the actuary provided the following additional data for 2020. Service cost $99,000 Settlement rate, 9%; expected return rate, 10% Actual return on plan assets 42,000 Amortization of prior service cost 25,000 Contributions 124,000 Benefits paid retirees 82,000 Average remaining service life of active employees 10 years Using the preceding data, compute pension expense for Blossom Corp. for the year 2020 by preparing a pension worksheet that shows the journal entry for pension expense. (Enter all amounts as positive.) PLEASE FIX THE INCORRECT…arrow_forwardBb.24.arrow_forwardHh1.arrow_forward
- Blossom Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2020 and 2021. 2020 2021 Projected benefit obligation, January 1 $601,000 Plan assets (fair value and market-related value), January 1 413,800 Pension asset/liability, January 1 187,200 Cr. Prior service cost, January 1 161,600 Service cost 40,200 $59,000 Settlement rate 10 % 10 % Expected rate of return 10 % 10 % Actual return on plan assets 35,900 61,200 Amortization of prior service cost 69,800 50,500 Annual contributions 96,700 81,000 Benefits paid retirees 31,400 54,600 Increase in projected benefit obligation due to changes in actuarial assumptions 86,900 0 Accumulated benefit obligation at December 31 716,500 788,800 Average service life of all employees 20 years Vested benefit obligation at December 31 466,800 (a) Prepare a pension worksheet presenting both years 2020 and 2021 and accompanying computationsand amortization of the loss…arrow_forwardHarvey Hotels has provided a defined benefit pension plan for its employees for several years. At the end of the most recent year, the following information was available with regard to the plan: service cost: $6.2 million, expected return on plan assets: $1.2 million, actual return on plan assets: $1 million, interest cost: $1.4 million, payments to retired employees: $2 million, and amortization of prior service cost (created when the pension plan was amended causing a drop in the projected benefit obligation): $1.1 million. What amount should Harvey Hotels report as pension expense in its income statement for the year? A- 1.4 million B-7.5 million C- 7.7 million D- 8.7 million O A O B O C O Darrow_forwardBlossom Corp. sponsors a defined benefit pension plan for its employees. On January I, 2025, the following balances relate to this plan. Plan assets: $460,000 Projected benefit obligation: $606,500 Pension asset/liability: $146,500 Accumulated OCI (PSC): 104,200 Dr. As a result of the operation of the plan during 2025, the following additional data are provided by the actuary. Service cost: $93,500 Settlement rate, 10% Actual return on plan assets: $54,600 Amortization of prior service cost: $18,100 Expected return on plan assets: $51,600 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions: $76,600 Contributions: $100,500 Benefits paid retirees: $84,300 Using the data above, compute pension expense for Blossom for the year 2025 by preparing a pension worksheet. (Enter all amounts as positive.)arrow_forward
- Pension data for Millington Enterprises include the following: (S in millions) Discount rate, 10% Projected benefit obligation, January 1 Projected benefit obligation, December 31 Accumulated benefit obligation, January 1 Accumulated benefit obligation, December 31 Cash contributions to pension fund, December 31 Benefit payments to retirees, December 31 $360 465 300 415 150 54 Required: Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31.arrow_forwardThe following information relates to Black Corporation's defined benefit pension plan during the current reporting year: Plan assets at fair value, January 1 Expected return on plan assets Actual return on plan assets Contributions to the pension fund (end of year) $640,000,000 54,000,000 44,000,000 94,000,000 Amortization of net loss Pension benefits paid (end of year) Pension expense 36,000,000 64,000,000 Required: Determine the balance of pension plan assets at fair value on December 31. (Enter your answers in millions. Amounts to be deducted should be indicated with a minus sign.) Pension Plan ($ in millions) Plan assets beginning of the year Plan assets end of the yeararrow_forwardWildhorse Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $817,830 $993,330 Projected benefit obligation, January 1 819,000 936,000 Pension asset/liability, January 1 163,800 Cr. ? Prior service cost, January 1 292,500 280,800 Service cost 70,200 105,300 Actual and expected return on plan assets 28,080 35,100 Amortization of prior service cost 11,700 14,040 Contributions (funding) 134,550 140,400 Accumulated benefit obligation, December 31 585,000 643,500 Interest/settlement rate 10 % 10 % Prepare the journal entries to record the pension expense and the company’s funding of the pension plan for both years.arrow_forward
- On January 1, 2022, Seascape Ltd. reported the following balances relating to their defined benefit pension plan. Seascape Ltd. uses ASPE. Defined benefit obligation $ 2,100,000 Fair value of plan assets. 1,900,000 Other data related to the pension plan for 2022 are: Current service cost 110,000 Contributions to the plan 105,000 Benefits paid.. 180,000 Actual return on plan assets. 142,000 Interest (discount) rate 7% Past service costs, Jan 1 120,000 Actuary adjustment, Dec 31 220,000 Pension Asset/Liability account on Balance Sheet Instructions a) Calculate the defined benefit obligation at December 31, 2022. b) Calculate the fair value of plan assets at December 31, 2022. c) Calculate pension expense for 2022. d) Prepare the journal entries to record the pension expense and the contributions for 2022. e) How would your answer be different if the company used IFRS? f) What is the funded status of the plan on December 31, 2022? Indicate whether it is underfunded or overfunded.arrow_forwardUSLM Inc. has a defined benefit pension plan. At the end of the year 20X4, the pension fund assets were $7,860,000 and the defined benefit obligation was $7,345,000. Invoking the asset ceiling caps the net defined benefit asset at $353,000. Required: Prepare the journal entry to correctly recognize the net defined benefit asset. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjusting entry for net defined benefit asset. Note: Enter debits before credits. >arrow_forwardThe Kollar Company has a defined benefit pension plan. Pension Information concerning the fiscal years 2024 and 2025 are presented below ($ in millions): Information Provided by Pension Plan Actuary: a. Projected benefit obligation as of December 31, 2023 = $3,200. b. Prior service cost from plan amendment on January 2, 2024 = $600 (straight-line amortization for 10-year average remaining service period). c. Service cost for 2024 = $640. d. Service cost for 2025 = $690. e. Discount rate used by actuary on projected benefit obligation for 2024 and 2025 = 10% f. Payments to retirees in 2024 = $500. g. Payments to retirees in 2025 = $570. h. No changes in actuarial assumptions or estimates. 1. Net gain-AOCI on January 1, 2024 = $370. J. Net gains and losses are amortized for 10 years in 2024 and 2025. Information Provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2024 = $2,300. b. 2024 contributions = $660. c. 2025 contributions = $710. d. Expected…arrow_forward
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