oriander Co. (CC), a public company, has had a defined benefit pension plan for 30 years. Two years ago, CC improved the benefits at a cost of $3,100,000. At July 1, 2020, pension plan assets were $60,000,000, and pension obligations were $50,000,000. For the year ended June 30, 2021, CC’s pension plan incurred current service costs of $5,400,000, and the pension assets actually earned $4,400,000. There were NO actuarial gains or losses for the year ended June 30, 2021. CC’s discount rate is 8%. Required: Calculate CC’s pension expense for the year ended June 30, 2021, and prepare the journal entries for its pension plan during this period.
oriander Co. (CC), a public company, has had a defined benefit pension plan for 30 years. Two years ago, CC improved the benefits at a cost of $3,100,000. At July 1, 2020, pension plan assets were $60,000,000, and pension obligations were $50,000,000. For the year ended June 30, 2021, CC’s pension plan incurred current service costs of $5,400,000, and the pension assets actually earned $4,400,000. There were NO actuarial gains or losses for the year ended June 30, 2021. CC’s discount rate is 8%. Required: Calculate CC’s pension expense for the year ended June 30, 2021, and prepare the journal entries for its pension plan during this period.
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 11E
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Question
Coriander Co. (CC), a public company, has had a defined benefit pension plan for 30 years. Two years ago, CC improved the benefits at a cost of $3,100,000.
At July 1, 2020, pension plan assets were $60,000,000, and pension obligations were
$50,000,000.
For the year ended June 30, 2021, CC’s pension plan incurred current service costs of
$5,400,000, and the pension assets actually earned $4,400,000. There were NO
actuarial gains or losses for the year ended June 30, 2021. CC’s discount rate is 8%.
Required:
Calculate CC’s pension expense for the year ended June 30, 2021, and prepare the
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