Pension expense : Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees. Pension expense includes the following components: Service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of net loss or net gain Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize : H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

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Answer 1

Question

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

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Problem 17-9 (Static) Determine pension expense; PBO; plan assets; net pension asset or liability; journal entries [LO17-3, 17-4, 17-5, 17-6 ,17-7 ,17-8] Check my work U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020. Plan assets $400,000 320,000 Projected benefit obligation U.S.M's actuary determined that 2021 service cost is $60,000. Both the expected and actual rate of return on plan assets are 9%. The interest (discount) rate is 5%. U.S.M. contributed $120,000 to the pension fund at the end of 2021, and retirees were paid $44,000 from plan assets. (Enter your answers in thousands (L.e., 10,000 should be entered as 10).) Required: 1. What is the pension expense at the end of 2021? 2. What is the projected benefit obligation at the end of 2021? 3. What is the plan assets balance at the end of 2021? 4. What is the net pension asset or net pension liability at the end of 2021? 5. Prepare journal entries to…

Answer 2

Question

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

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Answer 3

Question

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

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Answer 4

Question

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

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Answer 5

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

Answer 6

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

Answer 7

Chapter 17, Problem 17.4E

(1)

To determine

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

Service cost

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss or net gain

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net loss is $2,000,000.

Answer 8

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

Answer 9

(2)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

Answer 10

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

Answer 11

(3)

To determine

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

Answer 12

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Ch. 17 - Prob. 17.1Q Ch. 17 - Prob. 17.2Q Ch. 17 - Prob. 17.3Q Ch. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5Q Ch. 17 - Prob. 17.6Q Ch. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8Q Ch. 17 - Prob. 17.9Q Ch. 17 - Prob. 17.10Q

Concept explainers

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000

To journalize: H’s pension expense, if service cost is $10,000,000, interest cost is $6,000,000, expected return on assets is $4,000,000, and amortization of net gain is $2,000,000.

Chapter 17 Solutions