AA Computing Amortization of Pension Gain/LossOn January 1, K. Crew Inc. reported a $16,800 credit balance in its Accumulated OCI-Pension Gain/Loss account related to its pensionplan. During the year, the following events occurred.• Actual return on plan assets was $22,400, and expected return was $28,000.A gain on the PBO of $11,200 was determined by the actuary at December 31, based on changes in actuarial assumptions.K. Crew amortizes unrecognized gains and losses using the corridor approach over the average remaining service life of activeemployees (20 years for this year and next year). Further information on this plan follows.Jan. 1Dec. 31PBO$140,000 $156,800Fair value of plan assets 84,000 95,200

Part 2: Explanation:Step 1: Calculate the corridor.The corridor is 10% of the larger of the PBO or…

Answered: Computing Amortization of Pension…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Pension data for Carolina Consulting Company included the following for the current calendar year: Service cost PBO, January 1 Plan assets, January 1 Amortization of prior service cost Amortization of net loss Discount rate, 6% Expected return on plan assets, Actual return on plan assets, 10% $116,000 830,000 880,000 6,800 2,800 8% Required: Determine pension expense for the year. (Amounts to be deducted should be indicated with a minus sign.) Pension Expense Pension expense
Analyzing Pension Gain/Loss Spears Company presents the following information related to its pension plan for the year, before recording pension expense. Projected Benefit Obligation, Jan. 1: $300,000 Cr Projected Benefit Obligation, Dec. 31: 325,000 Cr Accumulated OCI-Pension Gain/Loss, Jan. 1: 12,000 Cr Plan Assets, Jan. 1: 280,000 Dr Plan Assets, Dec.31: 295,000 Dr Actuarial loss on PBO, determined at Dec. 31: $4,200 Contributions to pension fund: 10,000 Benefits paid: 15,000 Average remaining service period of employees, current and next year: 20 years Expected rate of return: 10% Required: a, Determine the amortization of Accumulated OCI-Pension Gain/Loss for the current year, usign (1) corridor (minimum amortization) and (2) straight-line amortization based on average remaining service period. Note: Do not use negative signs with your answers. 1. Amortization under the corridor approach. 2. Amortization under the straight-line method. b. Determine the Accumulated OCI-Pension…
Computing Amortization of Pension Gain/Loss On January 1, K. Crew Inc. reported a $16,800 credit balance in its Accumulated OCI-Pension Gain/Loss account related to its pension plan. During the year, the following events occurred. • Actual return on plan assets was $22,400, and expected return was $28,000. A gain on the PBO of $11,200 was determined by the actuary at December 31, based on changes in actuarial assumptions. K. Crew amortizes unrecognized gains and losses using the corridor approach over the average remaining service life of active employees (20 years for this year and next year). Further information on this plan follows. Jan. 1 Dec. 31 PBO $140,000 $156,800 Fair value of plan assets 84,000 95,200
The Pension Expense in a pension plan for the year were recorded at $856,800. In addition, an amount of $161,400 had been debited to the Other Comprehensive Income account to record all actuarial losses for the year. In addition, the company had contributed a cash amount of $350,000 to the Plan Assets. What would have been the amount recorded as Pension expenses for 2019 if the company were reporting under ASPE? Select one: a. $856,800. b. $757,200. c. $161,400. d. $350,000. e. None of the above.
Jolo Company provided the following data: January 1 Fair Value of plan assets 8,750,000 During the year Pension benefits paid 600,000 Contribution made to the fund 700,000 Interest income on plan assets 900,000 Remeasurement gain on plan assets December 31 Fair value of plan assets 9,950,000 What amount was reported by Jolo Company as actual return on plan assets?
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 $360 465 300 415 150 54 Required: Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31.
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The following data relate to Ramesh Company's defined benefit pension plan: ($ in millions) Plan assets at fair value, January 1 $720 Expected return on plan assets 72 Actual return on plan assets 58 Contributions to the pension fund (end of year) 124 Amortization of net loss 14 Pension benefits paid (end of year) 17 Pension expense 96 Required: Determine the amount of pension plan assets at fair…
The following data relate to Voltaire Company's defined benefit pension plan: ($ in millions) 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) Amortization of net loss Pension benefits paid (end of year) Pension expense $600 60 48 100 10 11 72 Required: Determine the amount of pension plan assets at fair value on December 31.
Calculating Pension Expense Stars Inc. has a noncontributory defined pension plan for its employees. During the year, the company had service cost of $60,000, an expected return on plan assets of $9,280, amortization of prior service cost of $2.000, amortization of net pension loss of $2,222, and benefits paid to employees of $40,000. The January 1 balance in its projected benefit obligation was $194,000. The discount rate is 10%. Required Calculate pension expense for the year. Check
Harrison Forklift’s pension expense includes a service cost of $10 million. Harrison began the year with a pension liability of $28 million (underfunded pension plan). Required: Prepare the appropriate general journal entries to record Harrison’s pension expense in each of the following independent situations regarding the other components of pension expense ($ in millions): 1. Interest cost, $6; expected return on assets, $4; amortization of net loss, $2. 2. Interest cost, $6; expected return on assets, $4; amortization of net gain, $2. 3. Interest cost, $6; expected return on assets, $4; amortization of net loss, $2; amortization of prior service cost, $3 million.
Goldman Company has a defined benefit pension plan. The following pension-related data were available for the current calendar year: PBO: Balance, Jan. 1 $ 230,000 Service cost 31,000 Interest cost (5% discount rate) 11,500 Gain from changes in actuarial assumptions in 2021 (4,000 ) Benefits paid to retirees (10,000 ) Balance, Dec. 31 $ 258,500 Plan assets: Balance, Jan.1 $ 240,000 Actual return (expected return was $21,500) 20,000 Contributions 25,000 Benefits paid (10,000 ) Balance, Dec. 31 $ 275,000 ABO, Dec. 31 $ 234,000 January 1, 2021, balances: Prior service cost–AOCI (amortization $5,400/yr.) 5,400 Net gain–AOCI (amortization, if any, over 15 years) 54,000 There were no other relevant data.Required:1. Calculate the 2021 pension expense.2. Prepare the 2021 journal entries to record pension expense and funding.3. Prepare any journal entries to record any 2021 gains or losses.

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