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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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
3. Prepare any journal entries to record any 2021 gains or losses.
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