INTERMEDIATE ACCOUNTING 2 EMPLOYEE BENEFITS Problem 10-1 On January 1, 2020, TRISHA COMPANY reported the fair value of plan assets at Excráses P6,000,000 and projected benefit obligation at P8,000,000. During the year, the entity made a lump-sum payment to certain plan participants in exchange for their rights to receive specified postemployment benefits. The lump sum payment was P800,000 and the present value of the defined benefit obligation settled was P1,000,000. In addition, the following data are gathered during the current year: Current service cost 900,000 Actual return on plan assets 800,000 Contribution to the plan 700,000 Discount rate 12% Required: 1. Determine the following: a. Employee benefit expense b. Fair value of assets as at December 31, 2020 c. Projected benefit obligation as at December 31, 2020 d. Prepaid or accrued benefit as at December 31, 2020 2. Entry to record retirement related accounts for 2020.

INTERMEDIATE ACCOUNTING 2 EMPLOYEE BENEFITS Problem 10-1 On January 1, 2020, TRISHA COMPANY reported the fair value of plan assets at Excráses P6,000,000 and projected benefit obligation at P8,000,000. During the year, the entity made a lump-sum payment to certain plan participants in exchange for their rights to receive specified postemployment benefits. The lump sum payment was P800,000 and the present value of the defined benefit obligation settled was P1,000,000. In addition, the following data are gathered during the current year: Current service cost 900,000 Actual return on plan assets 800,000 Contribution to the plan 700,000 Discount rate 12% Required: 1. Determine the following: a. Employee benefit expense b. Fair value of assets as at December 31, 2020 c. Projected benefit obligation as at December 31, 2020 d. Prepaid or accrued benefit as at December 31, 2020 2. Entry to record retirement related accounts for 2020.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 74E

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LO.2 Oak Corporation has the following general business credit carryovers. If the general business credit generated by activities during 2019 equals 36,000 and the total credit allowed during the current year is 60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2019 income tax liability? What is the amount of unused credit carried forward to 2020?
Financial Statement Violations of U.S. GAAP The following are the financial statements issued by Allen Corporation for its fiscal year ended October 31, 2019: Notes to Financial Statements: 1. Long-Term Lease. Under the terms of a 5-year, noncancelable lease for a building, Allen is obligated to make annual rental payments of 40,000 in each of the next 4 fiscal years. 2. Pension Plan. Substai1tially all employees are covered by Allens defined benefit pension plan. Pension expense is equal to the total of pension benefits accrued and paid to retired employees during the year. Because it is a defined benefit plan that is paid every year, no pension liability exists. 3. Patent. The patent had an estimated remaining life of 10 years at the time of purchase. Allens patent was purchased from Apex Corporation on January 1, 2019, for 250,000. 4. Deferred Income Tax Payable. The entire balai1ce in the Deferred Income Tax Payable account arose from tax-exempt municipal bonds that were held during the previous fiscal year, giving rise to a difference between taxable income and reported net earnings for the fiscal year ended October 31, 2019. The deferred liability amount was calculated on the basis of past tax rates. 5. Warrants. On January 1, 2018, one common stock warrant was issued to shareholders of record for each common share owned. An additional share of common stock is to be issued upon exercise of 10 stock warrants and receipt of an amount equal to par value. For the 6 months ended October 31, 2019, the average market value for Allens common stock was 5 per share and no warrants had yet been exercised. 6. Contingent Liability. On October 31, 2019, Allen was contingently liable for product warranties in an amount estimated to aggregate 75,000. Required: Next Level Review the preceding financial state1nents and related notes. Identify any inclusions or exclusions from them that would be in violation of GAAP, and indicate corrective action to be taken. Do not comment as to format or style. Respond in the following order: 1. Balance sheet 2. Notes 3. Income statement 4. Statement of retained earnings 5. General
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Question 16 Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets $463,200 Projected benefit obligation 578,200 Pension asset/liability 115,000 Accumulated OCI (PSC) 100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost $86,600 Settlement rate, 8% Actual return on plan assets 53,200 Amortization of prior service cost 18,000 Expected return on plan assets 50,200 Unexpected loss from change in projected benefit obligation,   due to change in actuarial predictions 79,600 Contributions 99,600 Benefits paid retirees 85,100 Prepare the journal entry for pension expense for 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…
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