Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 3%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,660,000 as of 1 January 20X7. The company will pay $208,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 20X7 20X8 Current service cost $ 121,000 $ 165,000 Actual return on fund assets − 7,200 Decrease in defined benefit obligation at year-end due to change in assumptions − 41,000 Payments to pensioners at end of year − 43,400 Required: Prepare a spreadsheet containing all relevant pension information for 20X7 and 20X8.
Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 3%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,660,000 as of 1 January 20X7. The company will pay $208,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated. Data for 20X7 and 20X8 20X7 20X8 Current service cost $ 121,000 $ 165,000 Actual return on fund assets − 7,200 Decrease in defined benefit obligation at year-end due to change in assumptions − 41,000 Payments to pensioners at end of year − 43,400 Required: Prepare a spreadsheet containing all relevant pension information for 20X7 and 20X8.
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 13E
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Question
Jones Manufacturing Inc. sponsored a defined benefit pension plan effective 1 January 20X7. The company uses the projected unit credit actuarial cost method for funding and accounting. Long-term corporate bonds have a yield of 3%. Employees were granted partial credit for past service. The past service obligation has been measured at $1,660,000 as of 1 January 20X7. The company will pay $208,000 (for past service) plus all current service cost to the pension plan trustee each 31 December beginning 31 December 20X7. This funding arrangement will continue for five years and then be re-evaluated.
Data for 20X7 and 20X8
| 20X7 | 20X8 | |||||
| Current service cost | $ | 121,000 | $ | 165,000 | ||
| Actual return on fund assets | − | 7,200 | ||||
| Decrease in defined benefit obligation at year-end due to change in assumptions | − | 41,000 | ||||
| Payments to pensioners at end of year | − | 43,400 | ||||
Required:
Prepare a spreadsheet containing all relevant pension information for 20X7 and 20X8.
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