Buhl Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.Plan assets$480,000Defined benefit obligation600,000Pension asset/liability120,000As a result of the operation of the plan during 2020, the following additional data are provided by the actuary.Service cost for 2020$90,000Discount rate, 6% Actual return on plan assets in 202055,000Unexpected loss from change in defined benefit obligation, due to change in actuarial predictions76,000Contributions in 202099,000Benefits paid retirees in 202085,000Instructionsa.    Using the data above, compute pension expense for Buhl Corp. for the year 2020 by preparing a pension worksheet.b.    Prepare the journal entry for pension expense for 2020.

Question
Asked Jan 26, 2020
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Buhl Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.

Plan assets
$480,000
Defined benefit obligation
600,000
Pension asset/liability
120,000

As a result of the operation of the plan during 2020, the following additional data are provided by the actuary.

Service cost for 2020
$90,000
Discount rate, 6%
 
Actual return on plan assets in 2020
55,000
Unexpected loss from change in defined benefit obligation,
 due to change in actuarial predictions
76,000
Contributions in 2020
99,000
Benefits paid retirees in 2020
85,000

Instructions

a.    Using the data above, compute pension expense for Buhl Corp. for the year 2020 by preparing a pension worksheet.

b.    Prepare the journal entry for pension expense for 2020.

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Expert Answer

Step 1

a) Pension worksheet is prepared to prepare the necessary journal entry to post the pension expenses in the general ledger and also derive the balances of related assets and liabilities.

Step 2

a. The pension worksheet has b...

Accounting homework question answer, step 2, image 1
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