Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 19, Problem 1P
To determine
Prepare a pension plan worksheet for 2019 and 2020, and prepare necessary
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When Turner Company adopted its defined benefit pension plan on January 1, 2019, it awarded retroactive benefits to its employees. These retroactive benefits resulted in a prior service cost of $980,000 that created a projected benefit obligation of the same amount on that date (which it did not fund). Turner decided to amortize the prior service cost using the years-of-future-service method. Turner’s actuary and funding agency have provided the following additional information for 2019 and 2020: (1) service cost: 2019, $187,000; 2020, $189,000; (2) plan assets: 1/1/2019, $0; 1/1/2020, $342,000; (3) expected long-term (and actual) rate of return on plan assets: 2020, 9%; (4) discount rate for both 2019 and 2020: 8%; and (5) amortization fraction for prior service cost: 2019, 80/980; 2020, 79/980. Turner contributed $342,000 and $336,000 to the pension fund at the end of 2019 and 2020, respectively. No retirement benefits were paid in either year. There are no other components of…
Farber Company adopted a defined benefit pension plan on January 1, 2019, at which time it awarded retroactive benefits to its employees. This prior service cost amounted to $200,000, which the company did not fund. Farber planned to amortize this prior service cost in the amount of $10,000 per year. Farber determined its pension expense (which included the prior service cost amortization) to be $75,000 for 2019, of which the company funded $74,000. At the end of 2019, the fair value of the pension plan assets was $74,000 and Farber’s projected benefit obligation was $265,000.
Prepare all the journal entries related to Farber’s pension plan for 2019.
Prepare all the journal entries related to Farber’s pension plan for 2019.
Jay Company has had a defined benefit pension plan for several years. At the beginning of 2019, Jay amended the plan; this amendment provided for increased benefits to employees based on services rendered in prior periods. The prior service cost related to this amendment totaled $88,000. As a result, the projected benefit obligation increased. Jay decided not to fund the increased obligation at the time of the amendment, but rather to increase its periodic year-end contributions to the pension plan.
The following information for 2019 has been provided by Jay’s actuary and funding agency and obtained from a review of its accounting records:
Projected benefit obligation (12/31)
$808,090
Service cost
183,000
Discount rate
9%
Cumulative net loss (1/1)
64,500
Company contribution to pension plan (12/31)
200,000
Projected benefit obligation (1/1)*
513,000
Plan assets, fair value (12/31)
698,000
Accrued pension cost (liability) (1/1)
33,000*
Expected (and actual) return…
Chapter 19 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 19 - Prob. 1GICh. 19 - Prob. 2GICh. 19 - Prob. 3GICh. 19 - Prob. 4GICh. 19 - Prob. 5GICh. 19 - Prob. 6GICh. 19 - Prob. 7GICh. 19 - Prob. 8GICh. 19 - Prob. 9GICh. 19 - Prob. 10GI
Ch. 19 - Prob. 11GICh. 19 - Prob. 12GICh. 19 - Prob. 13GICh. 19 - Prob. 14GICh. 19 - Prob. 15GICh. 19 - Prob. 16GICh. 19 - Prob. 17GICh. 19 - Prob. 18GICh. 19 - Prob. 19GICh. 19 - Prob. 20GICh. 19 - Prob. 21GICh. 19 - Prob. 22GICh. 19 - Prob. 23GICh. 19 - The actuarial present value of all the benefits...Ch. 19 - Prob. 2MCCh. 19 - Prob. 3MCCh. 19 - Prob. 4MCCh. 19 - Prob. 5MCCh. 19 - Prob. 6MCCh. 19 - Which of the following is not a component of...Ch. 19 - Prob. 8MCCh. 19 - Prob. 9MCCh. 19 - Prob. 10MCCh. 19 - Prob. 1RECh. 19 - Prob. 2RECh. 19 - Pinecone Company has plan assets of 500,000 at the...Ch. 19 - Prob. 4RECh. 19 - Prob. 5RECh. 19 - Prob. 6RECh. 19 - Prob. 7RECh. 19 - Prob. 8RECh. 19 - Given the following information for Tyler Companys...Ch. 19 - At the beginning of Year 1, Cactus Company has...Ch. 19 - Prob. 11RECh. 19 - Prob. 1ECh. 19 - Prob. 2ECh. 19 - Prob. 3ECh. 19 - Prob. 4ECh. 19 - Prob. 5ECh. 19 - Prob. 6ECh. 19 - Prob. 7ECh. 19 - Prob. 8ECh. 19 - Prob. 9ECh. 19 - Prob. 10ECh. 19 - Prob. 11ECh. 19 - Prob. 12ECh. 19 - Prob. 13ECh. 19 - Refer to the information provided in E19-13....Ch. 19 - Prob. 15ECh. 19 - Prob. 16ECh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - Prob. 12PCh. 19 - Prob. 1CCh. 19 - Prob. 2CCh. 19 - Prob. 3CCh. 19 - Prob. 4CCh. 19 - Prob. 5CCh. 19 - Prob. 6CCh. 19 - Prob. 7CCh. 19 - Prob. 9C
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- On January 1, 2019, Smith Company adopted a defined benefit pension plan. At that time, Smith awarded retroactive benefits to its employees, resulting in a prior service cost that created a projected benefit obligation of $1,250,000 on that date (which it did not fund). Smith decided to amortize the prior service cost by the straight-line method over the 20-year average remaining service life of its active participating employees. Smith’s actuary has also provided the following additional information for 2019 and 2020: (1) service cost: 2019, $145,000; 2020, $152,000; (2) expected (and actual) return on plan assets: 2020, $32,000; and (3) projected benefit obligation: 1/1/2020, $1,520,000. The discount rate was 10% in both 2019 and 2020. Smith contributed $330,000 and $350,000 to the pension fund at the end of 2019 and 2020, respectively. There are no other components of Smith’s pension expense. Required: 1. Compute the amount of Smith’s pension expense for 2019 and 2020. 2.…arrow_forwardOn January 1, 2019, James Company adopted a defined benefit pension plan. At that time, James awarded retroactive benefits to its employees, resulting in a prior service cost that created a projected benefit obligation of $1,250,000 on that date (which it did not fund). James decided to amortize the prior service cost by the straight-line method over the 20-year average remaining service life of its active participating employees. James' actuary has also provided the following additional information for 2019 and 2020: (1) service cost: 2019, $145,000; 2020, $152,000; (2) expected (and actual) return on plan assets: 2020, $34,000; and (3) projected benefit obligation: 1/1/2020, $1,520,000. The discount rate was 10% in both 2019 and 2020. James contributed $330,000 and $350,000 to the pension fund at the end of 2019 and 2020, respectively. There are no other components of James' pension expense. Required: 1. Compute the amount of James' pension expense for 2019 and 2020. 2. Prepare…arrow_forwardTAN Company has a defined benefit pension plan for its employees. The plan has been in existence for several years. During 2018, for the first time, TAN experienced a difference between its expected and actual projected benefit obligation. This resulted in a cumulative “experience” loss of $29,000 at the end of 2018, which it recorded and which did not change during 2019. TAN amortizes any excess loss by the straight-line method over the average remaining service life of its active participating employees. It has developed the following schedule concerning these 40 employees: Employee Numbers Expected Years of Future Service Employee Numbers Expected Years of Future Service 1–5 3 21–25 15 6–10 6 26–30 18 11–15 9 31–35 21 16–20 12 36–40 24 TAN makes its contribution to the pension plan at the end of each year. However, it has not always funded the entire pension expense in a given year. As a result, it had an accrued…arrow_forward
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