Sage Company provides the following selected information related to its defined benefit pension plan for 2020. Pension asset/liability (January 1) $25,600 Cr. Accumulated benefit obligation (December 31) 400,600 Actual and expected return on plan assets 10,400 Contributions (funding) in 2020 148,800 Fair value of plan assets (December 31) 796,000 Settlement rate 10 % Projected benefit obligation (January 1)
Sage Company provides the following selected information related to its defined benefit pension plan for 2020. Pension asset/liability (January 1) $25,600 Cr. Accumulated benefit obligation (December 31) 400,600 Actual and expected return on plan assets 10,400 Contributions (funding) in 2020 148,800 Fair value of plan assets (December 31) 796,000 Settlement rate 10 % Projected benefit obligation (January 1)
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 6E
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Question
Sage Company provides the following selected information related to its defined benefit pension plan for 2020.
| Pension asset/liability (January 1) | $25,600 | Cr. | |
| Accumulated benefit obligation (December 31) | 400,600 | ||
| Actual and expected return on plan assets | 10,400 | ||
| Contributions (funding) in 2020 | 148,800 | ||
| Fair value of plan assets (December 31) | 796,000 | ||
| Settlement rate | 10 | % | |
| Projected benefit obligation (January 1) | 698,500 | ||
| Service cost | 79,600 |
(a)
Compute pension expense.
Prepare thejournal entry to record pension expense and the employer’s contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $36,100. (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 enter 0 for the amounts.)
| Pension expense for 2020 |
$
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Prepare the
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Account Titles and Explanation
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Debit
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Credit
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