Indigo Company provides the following information about its defined benefit pension plan for the year 2020. Service cost $91,000 Contribution to the plan 104,000 Prior service cost amortization 9,400 Actual and expected return on plan assets 62,900 Benefits paid 39,900 Plan assets at January 1, 2020 630,400 Projected benefit obligation at January 1, 2020 701,800 Accumulated OCI (PSC) at January 1, 2020 153,000 Interest/discount (settlement) rate 10 % (b) Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit
Indigo Company provides the following information about its defined benefit pension plan for the year 2020. Service cost $91,000 Contribution to the plan 104,000 Prior service cost amortization 9,400 Actual and expected return on plan assets 62,900 Benefits paid 39,900 Plan assets at January 1, 2020 630,400 Projected benefit obligation at January 1, 2020 701,800 Accumulated OCI (PSC) at January 1, 2020 153,000 Interest/discount (settlement) rate 10 % (b) Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
5b.
Indigo Company provides the following information about its defined benefit pension plan for the year 2020.
Service cost | $91,000 | ||
Contribution to the plan | 104,000 | ||
Prior service cost amortization | 9,400 | ||
Actual and expected return on plan assets | 62,900 | ||
Benefits paid | 39,900 | ||
Plan assets at January 1, 2020 | 630,400 | ||
Projected benefit obligation at January 1, 2020 | 701,800 | ||
Accumulated OCI (PSC) at January 1, 2020 | 153,000 | ||
Interest/discount (settlement) rate | 10 | % |
(b)
Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
|
Debit
|
Credit
|
---|---|---|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
Expert Solution
Step 1
SOLUTION
CALCULATION OF PENSION EXPENSE-.
SERVICE COST | 91000 |
INTERST COST (701800*10%) | 70180 |
EXPECTED RETURN ON PLAN ASSETS | (62900) |
PRIOR SERVICE COST AMORTISATION | 9400 |
PENSION EXPENSE | 107680 |
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