GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 17, Problem 17.15E
To determine
Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.
To Complete: The pension spreadsheet.
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ZOOM
DaBree, Inc. received the following information form its pension plan trustee
concerning the operation of the company's defined-benefit pension plan for
the year ended December 31, 2020. The service cost component of pension
expense for 2020 is $625,000, and the amortization of prior service due to an
increase in benefits is $163,000. The settlement rate is 10% and the expected
rate of return is 8%. What is the amount of pension expense for 2020?
1/1/20
12/31/20
Projected benefit obligation
$874,000
$89,000
Pension assets (at fair value)
451,000
465,000
Accumulated benefit obligation
223,000
250,000
Net (gains) and losses
150,000
Pension Expense
ENG
ASA
INTL
ices
A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension
plan of Universal Products is given below. The actuary's discount rate is 5%. At the end of 2022, the pension formula was amended,
creating a prior service cost of $280,000. The expected rate of return on assets was 8%, and the average remaining service life of the
active employee group is 20 years in the current year, as well as, the previous two years.
Required:
Fill in the missing amounts.
Note: Enter your answers in thousands (i.e., 5,500 should be entered as 5.5). Enter credit amounts with a minus sign.
($ in thousands)
PBO
Plan Assets
Prior Service Net Loss
Cost-AOCI AOCI
Pension
Expense
Cash
Net Pension
(Liability)/
Asset
Balance January 1, 2024
Service cost
$ (840.0) $ 580.0
$
266.0 $
84.0
$
(260.0)
104.0
(42.0)
Interest cost, 5%
Expected return on assets
Adjust for:
Loss on assets
Amortization
Prior service cost
Amortization
Net loss
Gain on PBO…
Problem 17-2 (Algo) PBO calculations; present value concepts [LO17-3]
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.4% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $92,000 at the end of 2021 and the company's actuary projects her salary to be $290,000 at retirement. The actuary's discount rate is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021.3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer…
Chapter 17 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 17 - Prob. 17.1QCh. 17 - Prob. 17.2QCh. 17 - Prob. 17.3QCh. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5QCh. 17 - Prob. 17.6QCh. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - Prob. 17.10Q
Ch. 17 - The return on plan assets is the increase in plan...Ch. 17 - Define prior service cost. How is it reported in...Ch. 17 - Prob. 17.13QCh. 17 - Is a companys PBO reported in the balance sheet?...Ch. 17 - What two components of pension expense may be...Ch. 17 - Prob. 17.16QCh. 17 - Evaluate this statement: The excess of the actual...Ch. 17 - Prob. 17.18QCh. 17 - TFC Inc. revises its estimate of future salary...Ch. 17 - Prob. 17.20QCh. 17 - Prob. 17.21QCh. 17 - Prob. 17.22QCh. 17 - The components of postretirement benefit expense...Ch. 17 - The EPBO for Branch Industries at the end of 2018...Ch. 17 - Prob. 17.25QCh. 17 - Prob. 17.26QCh. 17 - Prob. 17.1BECh. 17 - Prob. 17.2BECh. 17 - Prob. 17.3BECh. 17 - Prob. 17.4BECh. 17 - Prob. 17.5BECh. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Net gain LO176 The projected benefit obligation...Ch. 17 - Prob. 17.12BECh. 17 - Prob. 17.13BECh. 17 - Postretirement benefits; determine the APBO and...Ch. 17 - Prob. 17.15BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Prob. 17.5ECh. 17 - Prob. 17.6ECh. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Prob. 17.9ECh. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - PBO calculations; ABO calculations; present value...Ch. 17 - Prob. 17.13ECh. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Prob. 17.16ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Prob. 17.21ECh. 17 - Prob. 17.22ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.25ECh. 17 - Prob. 17.26ECh. 17 - Prob. 17.27ECh. 17 - Prob. 17.28ECh. 17 - Prob. 17.29ECh. 17 - Prob. 17.30ECh. 17 - Prob. 17.31ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 17.1PCh. 17 - PBO calculations; present value concepts LO173...Ch. 17 - Service cost, interest, and PBO calculations;...Ch. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.6PCh. 17 - Determining the amortization of net gain LO176...Ch. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Prob. 17.13PCh. 17 - Prob. 17.14PCh. 17 - Prob. 17.15PCh. 17 - Prob. 17.16PCh. 17 - Prob. 17.17PCh. 17 - Prob. 17.18PCh. 17 - Prob. 17.19PCh. 17 - Prob. 17.20PCh. 17 - Prob. 17.21PCh. 17 - Prob. 17.1BYPCh. 17 - Prob. 17.2BYPCh. 17 - Prob. 17.3BYPCh. 17 - Prob. 17.5BYPCh. 17 - Prob. 17.6BYPCh. 17 - Prob. 17.7BYPCh. 17 - Prob. 17.8BYPCh. 17 - Prob. 17.9BYPCh. 17 - Prob. 17.11BYPCh. 17 - Prob. 1CCTCCh. 17 - Prob. 1CCIFRS
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- 3 continue b...  The following information is available for the pension plan of Vaughn Company for the year 2020. Actual and expected return on plan assets  $ 14,700  Benefits paid to retirees  40,800  Contributions (funding)  81,100  Interest/discount rate  10 % Prior service cost amortization  7,600  Projected benefit obligation, January 1, 2020  458,000  Service cost  63,900 Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. (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.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount…arrow_forwardQuestion 9# Oriole Company provides the following information about its defined benefit pension plan for the year 2020. Service cost  $91,700  Contribution to the plan  104,300  Prior service cost amortization  10,800  Actual and expected return on plan assets  65,300  Benefits paid  39,700  Plan assets at January 1, 2020  633,400  Projected benefit obligation at January 1, 2020  711,600  Accumulated OCI (PSC) at January 1, 2020  148,000  Interest/discount (settlement) rate  10 %  (b)   Prepare the journal entry recording pension expense. (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.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount…arrow_forwardKnowledge Check 01Calder Company has a defined benefit pension plan. Pension-related data for the current calendar year are shown below:     Average remaining service period of active employees  12 years Net gain, January 1 $ 214,600  PBO, January 1  1,630,000  Plan assets, January 1  1,930,000    What is the amount of the amortization of the net loss or gain that should be included as a component of pension expense for the current year?arrow_forward
- #13On January 1, 2020, Shaina company had a projected benefit obligation of 2,500,000 and apension fund with a fair value of 2,300,000. The entity provided the following informationrelated to the pension plan during the current year:Current service cost 300,000Actual return on the pension fund 62,500Benefits paid to retirees 275,000Contribution to the pension fund 262,500Discount rate 9%Expected return on pension fund 10%What is the pension expense for the current year?  The answer is 318,000 pls provide the correct solution for thisarrow_forwardProblem 17-6 (Static) Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 6% as the appropriate discount rate. The service cost is $150,000 for 2021 and $200,000 for 2022. Year-end funding is $160,000 for 2021 and $170,000 for 2022. No assumptions or estimates were revised during 2021. * We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers In…arrow_forwardProblem 17-6 (Static) Determine the PBO; plan assets; pension expense; two years [LO17-3, 17-4, 17-6] Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2021. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2021 and 2022.* A consulting firm, engaged as actuary, recommends 6% as the appropriate discount rate. The service cost is $150,000 for 2021 and $200,000 for 2022. Year-end funding is $160,000 for 2021 and $170,000 for 2022. No assumptions or estimates were revised during 2021. * We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2022. Required: Calculate each of the following amounts as of both December 31, 2021, and December 31, 2022: (Enter your answers in…arrow_forward
- Question 16## Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets  $463,200  Projected benefit obligation  578,200  Pension asset/liability  115,000  Accumulated OCI (PSC)  100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost  $86,600 Settlement rate, 8%   Actual return on plan assets  53,200 Amortization of prior service cost  18,000 Expected return on plan assets  50,200 Unexpected loss from change in projected benefit obligation,   due to change in actuarial predictions  79,600 Contributions  99,600 Benefits paid retirees  85,100  Also please help me answer part B. (b)   Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…arrow_forwardQuestion 9 Oriole Company provides the following information about its defined benefit pension plan for the year 2020. Service cost  $91,700  Contribution to the plan  104,300  Prior service cost amortization  10,800  Actual and expected return on plan assets  65,300  Benefits paid  39,700  Plan assets at January 1, 2020  633,400  Projected benefit obligation at January 1, 2020  711,600  Accumulated OCI (PSC) at January 1, 2020  148,000  Interest/discount (settlement) rate  10 % General Journal Entries  Memo Record Items  AnnualPension Expense  Cash  OCIPrior Service Cost  Pension Asset/Liability  Projected BenefitObligation  PlanAssets (b) The parts of this question must be completed in order. This part will be available when you complete the part above.arrow_forwardQUESTION 6 At January 1 2017 Hennein Oompanyhad plan assets of $280 000 and a projected benefit aligation of the same amount During 2017 service cost was $27 500 and settlement rate was 10% actual and expected return on plan assets was $25 000 contribuutions were $20 000 and benefits paid were $17 500 How much was Hennien Company's Pension Expense?arrow_forward
- Question 16# Buffalo Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan. Plan assets  $463,200  Projected benefit obligation  578,200  Pension asset/liability  115,000  Accumulated OCI (PSC)  100,100 Dr. As a result of the operation of the plan during 2020, the following additional data are provided by the actuary. Service cost  $86,600 Settlement rate, 8%   Actual return on plan assets  53,200 Amortization of prior service cost  18,000 Expected return on plan assets  50,200 Unexpected loss from change in projected benefit obligation,   due to change in actuarial predictions  79,600 Contributions  99,600 Benefits paid retirees  85,100  (b)   Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…arrow_forwardPlease need answer for all with full working please answer all with steps computation explanation formula please answer all  Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2024. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. The actual return was also 10% in 2024 and 2025.* A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $160,000 for 2024 and $210,000 for 2025. Year-end funding is $170,000 for 2024 and $180,000 for 2025. No assumptions or estimates were revised during 2024. *We assume the estimated return was based on the actual return on similar investments at the inception of the plan and that, since the estimate didn't change, that also was the actual rate in 2025. Required: Calculate each of the following amounts as of both December 31, 2024, and December 31, 2025:…arrow_forwardPROBLEM NO. 1 Mermade Corp. adopts the IFRS for its defined benefit retirement plan on January 1, 2021, with the following beginning balances: Fair Value of Plan Assets are Php 200,000.00 Defined Benefit Obligation is Php is 250,000.00 The following are other information relating to the years 2021, 2022, and 2023: 2023 2022 2021 P26,000.00 P 19,000.00 P 16,000.00 10% 10% 10% 20,000.00 24,000.00 22,000.00 48,000.00 40,000.00 16,000.00 21,000.00 16,400.00 14,000.00 Current service cost Discount rate Actual return on plan assets Contributions to the plan Benefits paid to retiree Other information: 1. The plan was amended on January 1, 2022 which resulted to a Past Service Cost of Php 160,000.00 2. On December 31, 2023, there were changes in the actuarial assumptions that establishes a defined benefit obligation as of December 31, 2023 in the amount of Php 520,000.00. Required: For each year (2021, 2022, and 2023), prepare a worksheet presenting the balances and the activities of the…arrow_forward
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