Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (a) Your Answer Correct Answer Correct answer icon Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense select a component of Pension Expense $enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense $enter a total amount eTextbook and Media Solution List of Accounts Attempts: 3 of 3 used (b) Correct answer icon Your answer is correct. Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (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 eTextbook and Media List of Accounts Attempts: 1 of 3 used (c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Swifty Company for the year 2020. Swifty Company Income Statement (Partial) choose the accounting period select an income statement item select an income statement item $enter a dollar amount Swifty Company Comprehensive Income Statement choose the accounting period select a comprehensive income item $XXXX select an opening section name select a comprehensive income item enter a dollar amount select a closing name for this statement $XXXX Swifty Company Balance Sheet (Partial) choose the accounting period select an opening name for section one select a balance sheet item $enter a dollar amount select an opening name for section two select a balance sheet item $enter a dollar amount
Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. (a) Your Answer Correct Answer Correct answer icon Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense select a component of Pension Expense $enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense enter a dollar amount select a component of Pension Expense $enter a total amount eTextbook and Media Solution List of Accounts Attempts: 3 of 3 used (b) Correct answer icon Your answer is correct. Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (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 eTextbook and Media List of Accounts Attempts: 1 of 3 used (c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Swifty Company for the year 2020. Swifty Company Income Statement (Partial) choose the accounting period select an income statement item select an income statement item $enter a dollar amount Swifty Company Comprehensive Income Statement choose the accounting period select a comprehensive income item $XXXX select an opening section name select a comprehensive income item enter a dollar amount select a closing name for this statement $XXXX Swifty Company Balance Sheet (Partial) choose the accounting period select an opening name for section one select a balance sheet item $enter a dollar amount select an opening name for section two select a balance sheet item $enter a dollar amount
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 1E
Related questions
Question
Swifty Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid.
1. | The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. | |
2. | The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. | |
3. | As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. | |
4. | Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. |
(a)
- Your Answer
- Correct Answer
Correct answer icon
Your answer is correct.
Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)
Components of Pension Expense
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select a component of Pension Expense
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$enter a dollar amount
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select a component of Pension Expense
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enter a dollar amount
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select a component of Pension Expense
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enter a dollar amount
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select a component of Pension Expense
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enter a dollar amount
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select a component of Pension Expense
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$enter a total amount
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eTextbook and Media
Solution
List of Accounts
Attempts: 3 of 3 used
(b)
Correct answer icon
Your answer is correct.
Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020. (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
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Credit
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---|---|---|
enter an account title
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enter a debit amount
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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
|
eTextbook and Media
List of Accounts
Attempts: 1 of 3 used
(c)
Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Swifty Company for the year 2020.
Swifty Company
Income Statement (Partial) choose the accounting period |
||
---|---|---|
select an income statement item
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||
select an income statement item
|
$enter a dollar amount
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Swifty Company
Comprehensive Income Statement choose the accounting period |
||
---|---|---|
select a comprehensive income item
|
$XXXX
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|
select an opening section name
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||
select a comprehensive income item
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enter a dollar amount
|
|
select a closing name for this statement
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$XXXX
|
Swifty Company
Balance Sheet (Partial) choose the accounting period |
||||||
---|---|---|---|---|---|---|
select an opening name for section one
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||||||
select a balance sheet item
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$enter a dollar amount
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|||||
select an opening name for section two
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||||||
select a balance sheet item
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$enter a dollar amount
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