Manchester City maintains a defined benefit pension plan for its employees. In a recent year, the city contributed $15 million to its pension fund. However, its annual pension expense and increase in net pension liability as calculated by its actuary was $32 million. The city accounts for the pension contributions in the general fund.1. Record the pension expenditure and related liability in the general fund and account group. 2. Suppose that in the following year the city contributed $20 million to its pension fund, but its annual pension expense and increase in net pension liability per its actuary was only $18 million. Prepare the appropriate journal entries.
Manchester City maintains a defined benefit pension plan for its employees. In a recent year, the city contributed $15 million to its pension fund. However, its annual pension expense and increase in net pension liability as calculated by its actuary was $32 million. The city accounts for the pension contributions in the general fund.
1. Record the pension expenditure and related liability in the general fund and account group.
2. Suppose that in the following year the city contributed $20 million to its pension fund, but its annual pension expense and increase in net pension liability per its actuary was only $18 million. Prepare the appropriate
Given:
Contribution to pension fund = $ 15 million
Net pension liability increase = $ 32 million
Concept:
The practice of keeping records of any transactions which is either economic or non-economic is called Journal entries. It is listed in an accounting journal that has the company’s credits and debits.
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