Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 4%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,695,000 as of 1 January 20X7. The company will pay $222,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Current service cost Actual return on fund assets Decrease in defined benefit obligation at year-end due to change in assumptions Payments to pensioners at end of year 20x7 20x8 $128,000 $179,000 7,900 48,000 46,900

Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 4%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,695,000 as of 1 January 20X7. The company will pay $222,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Current service cost Actual return on fund assets Decrease in defined benefit obligation at year-end due to change in assumptions Payments to pensioners at end of year 20x7 20x8 $128,000 $179,000 7,900 48,000 46,900

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows. Lemurs payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay. Record the entry for the employee payroll on December 31.
Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn 12% on its plan assets during the year. Pinecones service cost is 230,000, and its interest cost is 55,000. Compute Pine-cones pension expense for the current year.
In 2019, Magenta Corporation paid compensation of 45,300 to the participants in a profit sharing plan. During 2019, Magenta Corporation contributed 13,200 to the plan. a. Calculate Magentas deductible amount for 2019. b. Calculate the amount of any contribution carryover from 2019.
Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 3%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,660,000 as of 1 January 20X7. The company will pay $208,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 20X7 20X8 Current service cost $ 121,000 $ 165,000 Actual return on fund assets − 7,200 Decrease in defined benefit obligation at year-end due to change in assumptions − 41,000 Payments to pensioners at end of year − 43,400 Required:Prepare a spreadsheet containing all relevant pension information for 20X7 and 20X8.
Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 3%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,660,000 as of 1 January 20X7. The company will pay $208,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Required: Prepare a spreadsheet containing all relevant pension information for 20X7 and 20X8.
Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 4%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,685,000 as of 1 January 20X7. The company will pay $218,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Current service cost Actual return on fund assets Decrease in defined benefit obligation at year-end due to change in assumptions Payments to pensioners at end of year 20X7 $126,000 20x8 $175,000 7,700 46,000 45,900 Required: Prepare a spreadsheet containing all relevant pension Information for 20X7 and 20X8. Pension Obligation Plan Assets Pension Expense Net pension Asset…
Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 4%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,655,000 as of 1 January 20X7. The company will pay $206,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 Current service cost Actual return on fund assets Decrease in defined benefit obligation at year-end due to change in assumptions Payments to pensioners at end of year 20X7 $120,000 20X8 $163,000 7,100 40,000 42,900 Required: Prepare a spreadsheet containing all relevant pension information for 20X7 and 20X8.
Strum Corp. has maintained a defined benefit pension plan for its employees for a number of years. For Year 4, current service cost was $37,000 and interest on the projected benefit obligation was $18,000. Strum's return on plan assets, actual and estimated, was S8,000. On December 31, Year 4, Strum Corp. contributed $30,000 to its pension plan. Strum's Year 4 pension expense was: O S63,000 O S47,000 O S55,000 O $30,000
On January 1 of the current reporting year, Coda Company's projected benefit obligation was $3,000,000. During the year, pension benefits paid by the trustee were $400,000. Service cost was $875,000 . Pension plan assets earned $325,000 as expected. At the end of the year, there was no net gain or loss and no prior service cost. The actuary's discount rate was 10%. Determine the amount of the projected benefit obligation at December 31.
On January 1 of the current reporting year, Coda Company's projected benefit obligation was $29.3 million. During the year, pension benefits paid by the trustee were $3.3 million. Service cost was $9.3 million. Pension plan assets earned $4.3 million as expected. At the end of the year, there was no net gain or loss and no prior service cost. The actuary's discount rate was 10%. Required:Determine the amount of the projected benefit obligation at December 31. (Enter your answers in millions rounded to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.)
On January 1, 20X1, Cello Co. established a defined benefit pension plan for its employees. At January 1, 20X1, Cello estimated the service cost for 20X1 to be $45,000. At January 1, 20X2, it estimated 20X2 service cost to be $49,000. On the plan inception date, prior service credit was granted to employees for five years, the period of time between the company’s formation and plan inception. The prior service cost was estimated to be $650,000 at January 1, 20X1. Cello uses a 10% discount rate and assumes a return on plan assets of 9%. The average remaining service life of employees is 20 years, and the company will fund at the end of each year an amount equal to service cost plus interest cost for 20X1 and 20X2. December 31, 20X2 20X1 PBO ? ? Benefits paid at 12/31 2,000 0 Fair value of plan assets ? 0 Contributions at 12/31 ? ? Actual return on plan assets 3,200 0 Required: 6-a. Compute the amount of prior service…
On January 1, 20X1, Cello Co. established a defined benefit pension plan for its employees. At January 1, 20X1, Cello estimated the service cost for 20X1 to be $45,000. At January 1, 20X2, it estimated 20X2 service cost to be $49,000. On the plan inception date, prior service credit was granted to employees for five years, the period of time between the company's formation and plan inception. The prior service cost was estimated to be $650,000 at January 1, 20X1. Cello uses a 10% discount rate and assumes a return on plan assets of 9%. The average remaining service life of employees is 20 years, and the company will fund at the end of each year an amount equal to service cost plus interest cost for 20X1 and 20X2. December 31, 20X2 20X1 PBO Benefits paid at 12/31 Fair value of plan assets 2,000 ? Contributions at 12/31 Actual return on plan assets ? 3,200 Required: 1. Compute the amount of prior service cost to be included as a component of pension expense for 20X1. 2. Compute pension…