Determining Funded Status, Recording Pension Expense, Preparing Worksheet Rico Corporation initiated a defined benefit pension plan on January 1, 2020. The plan does not provide any retroactive benefits for existing employees. The pension funding payment is made to the trustee on December 31 of each year. The following information is available for 2020 and 2021. 2020 2021 Service cost $75,000 $82,500 Funding payment (contribution) 85,000 92,500 Interest on projected benefit obligation 7,500 Actual and expected return on plan assets 9,000 Financial Statement Presentation and Entries Pension Worksheet a. In its December 31, 2020, balance sheet, Rico should report what amount of net pension asset/liability? Balance Sheet December 31, 2020 Noncurrent assets Net pension asset Noncurrent liabilities Net pension liability b. In its December 31, 2021, balance sheet, Rico should report what amount of net pension asset/liability? Balance Sheet December 31, 2021 Noncurrent assets Net pension asset Noncurrent liabilities Net pension liability c. Prepare the journal entries to record pension expense and plan funding for 2021. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2021 To record pension expense Dec. 31, 2021 To record plan funding Determining Funded Status, Recording Pension Expense, Preparing Worksheet Rico Corporation initiated a defined benefit pension plan on January 1, 2020. The plan does not provide any retroactive benefits for existing employees. The pension funding payment is made to the trustee on December 31 of each year. The following information is available for 2020 and 2021. 2020 2021 Service cost $75,000 $82,500 Funding payment (contribution) 85,000 92,500 Interest on projected benefit obligation 7,500 Actual and expected return on plan assets 9,000 Financial Statement Presentation and Entries Pension Worksheet d. Create a worksheet to summarize the pension data at the end of 2021. Reported Net in Financial Statements Reported on Balance Sheet Reported in Income Statement Plan Assets PBO Net Pension Asset/Liability Cash Outflow Pension Expense Balance, January 1, 2021 Service cost Interest cost Expected return on plan assets Contributions to fund Balance, December 31, 2021

Determining Funded Status, Recording Pension Expense, Preparing Worksheet Rico Corporation initiated a defined benefit pension plan on January 1, 2020. The plan does not provide any retroactive benefits for existing employees. The pension funding payment is made to the trustee on December 31 of each year. The following information is available for 2020 and 2021. 2020 2021 Service cost $75,000 $82,500 Funding payment (contribution) 85,000 92,500 Interest on projected benefit obligation 7,500 Actual and expected return on plan assets 9,000 Financial Statement Presentation and Entries Pension Worksheet a. In its December 31, 2020, balance sheet, Rico should report what amount of net pension asset/liability? Balance Sheet December 31, 2020 Noncurrent assets Net pension asset Noncurrent liabilities Net pension liability b. In its December 31, 2021, balance sheet, Rico should report what amount of net pension asset/liability? Balance Sheet December 31, 2021 Noncurrent assets Net pension asset Noncurrent liabilities Net pension liability c. Prepare the journal entries to record pension expense and plan funding for 2021. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2021 To record pension expense Dec. 31, 2021 To record plan funding Determining Funded Status, Recording Pension Expense, Preparing Worksheet Rico Corporation initiated a defined benefit pension plan on January 1, 2020. The plan does not provide any retroactive benefits for existing employees. The pension funding payment is made to the trustee on December 31 of each year. The following information is available for 2020 and 2021. 2020 2021 Service cost $75,000 $82,500 Funding payment (contribution) 85,000 92,500 Interest on projected benefit obligation 7,500 Actual and expected return on plan assets 9,000 Financial Statement Presentation and Entries Pension Worksheet d. Create a worksheet to summarize the pension data at the end of 2021. Reported Net in Financial Statements Reported on Balance Sheet Reported in Income Statement Plan Assets PBO Net Pension Asset/Liability Cash Outflow Pension Expense Balance, January 1, 2021 Service cost Interest cost Expected return on plan assets Contributions to fund Balance, December 31, 2021

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 4E

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Related questions

Question

Determining Funded Status, Recording Pension Expense, Preparing Worksheet

Rico Corporation initiated a defined benefit pension plan on January 1, 2020. The plan does not provide any retroactive benefits for existing employees. The pension funding payment is made to the trustee on December 31 of each year. The following information is available for 2020 and 2021.

	2020	2021
Service cost	$75,000	$82,500
Funding payment (contribution)	85,000	92,500
Interest on projected benefit obligation		7,500
Actual and expected return on plan assets		9,000

Financial Statement Presentation and Entries
Pension Worksheet

a. In its December 31, 2020, balance sheet, Rico should report what amount of net pension asset/liability?

Balance Sheet
December 31, 2020
Noncurrent assets
Net pension asset
Noncurrent liabilities
Net pension liability

b. In its December 31, 2021, balance sheet, Rico should report what amount of net pension asset/liability?

Balance Sheet
December 31, 2021
Noncurrent assets
Net pension asset
Noncurrent liabilities
Net pension liability

c. Prepare the journal entries to record pension expense and plan funding for 2021.

Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.

Date	Account Name	Dr.	Cr.
Dec. 31, 2021


	To record pension expense
Dec. 31, 2021

	To record plan funding

Determining Funded Status, Recording Pension Expense, Preparing Worksheet

	2020	2021
Service cost	$75,000	$82,500
Funding payment (contribution)	85,000	92,500
Interest on projected benefit obligation		7,500
Actual and expected return on plan assets		9,000

Financial Statement Presentation and Entries
Pension Worksheet

d. Create a worksheet to summarize the pension data at the end of 2021.

	Reported Net in Financial Statements	Reported on Balance Sheet		Reported in Income Statement
	Plan Assets	PBO	Net Pension Asset/Liability	Cash Outflow	Pension Expense
Balance, January 1, 2021
Service cost
Interest cost
Expected return on plan assets
Contributions to fund
Balance, December 31, 2021