On January 1, 2020, Blue Company has the following defined benefit pension plan balances. Projected benefit obligation $4,506,000 Fair value of plan assets 4,220,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $508,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $152,000 $179,000 Prior service cost amortization 0 91,000 Contributions (funding) to the plan 237,000 281,000 Benefits paid 202,000 284,000 Actual return on plan assets 253,200 262,000 Expected rate of return on assets 6 % 8
On January 1, 2020, Blue Company has the following defined benefit pension plan balances. Projected benefit obligation $4,506,000 Fair value of plan assets 4,220,000 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $508,000 are created. Other data related to the pension plan are as follows. 2020 2021 Service cost $152,000 $179,000 Prior service cost amortization 0 91,000 Contributions (funding) to the plan 237,000 281,000 Benefits paid 202,000 284,000 Actual return on plan assets 253,200 262,000 Expected rate of return on assets 6 % 8
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2020, Blue Company has the following defined benefit pension plan balances.
| Projected benefit obligation | $4,506,000 | |
| Fair value of plan assets | 4,220,000 |
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $508,000 are created. Other data related to the pension plan are as follows.
|
2020
|
2021
|
|||||
|---|---|---|---|---|---|---|
| Service cost | $152,000 | $179,000 | ||||
| Prior service cost amortization | 0 | 91,000 | ||||
| Contributions (funding) to the plan | 237,000 | 281,000 | ||||
| Benefits paid | 202,000 | 284,000 | ||||
| Actual return on plan assets | 253,200 | 262,000 | ||||
| Expected |
6 | % | 8 | % |
Transcribed Image Text:Annual Pension
Items
Expense
Cash
Balance, Jan. 1, 2020
Service cost
Interest cost
Actual return
Contributions
Benefits
Journal entry for 2020
Accumulated OCI, Dec. 31, 2019
Balance, Dec. 31, 2020
Additional PSC, 1/1/2021
Balance, Jan. 1, 2021
Service cost
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Transcribed Image Text:Balance, Dec. 31, 2020
Additional PSC, 1/1/2021
Balance, Jan. 1, 2021
Service cost
Interest cost
Actual return
Unexpected loss
Amortization of PSC
Contributions
Benefits
Journal entry for 2021
Accumulated OCI, Dec. 31, 2020
Balance, Dec. 31, 2021
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