Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information: 2019 2020 Service cost $300,000 $450,000 Amount funded 240,000 390,000 Discount rate 10% 10% Expected rate of return 10% 10% The actual rate of return is equal to the expected return, and the company has not made any payments to retirees. In the journal entry to record pension expense, what is the amount of the credit entry to accrue pension cost on December 31? a. 2019 2020 $60,000 $126,000 b. 2019 2020 $0 $ 60,000 c. 2019 2020 $60,000 $60,000 d. 2019 2020 $60,000 $66,000
Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information: 2019 2020 Service cost $300,000 $450,000 Amount funded 240,000 390,000 Discount rate 10% 10% Expected rate of return 10% 10% The actual rate of return is equal to the expected return, and the company has not made any payments to retirees. In the journal entry to record pension expense, what is the amount of the credit entry to accrue pension cost on December 31? a. 2019 2020 $60,000 $126,000 b. 2019 2020 $0 $ 60,000 c. 2019 2020 $60,000 $60,000 d. 2019 2020 $60,000 $66,000
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 7E
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Defined Benefit Pension Plan:
Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information:
| 2019 | 2020 | |
| Service cost | $300,000 | $450,000 |
| Amount funded | 240,000 | 390,000 |
| Discount rate | 10% | 10% |
| Expected |
10% | 10% |
The actual rate of return is equal to the expected return, and the company has not made any payments to retirees.
In the
a.
| 2019 | 2020 | |
| $60,000 | $126,000 |
b.
| 2019 | 2020 | |
| $0 | $ 60,000 |
c.
| 2019 | 2020 | |
| $60,000 | $60,000 |
d.
| 2019 | 2020 | |
| $60,000 | $66,000 |
Answer: D
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