Gen Combo Looseleaf Intermediate Accounting; Connect Access Card
10th Edition
ISBN: 9781260696325
Author: David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 17, Problem 17.6E
To determine
Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.
To compute: Service cost from the given values of changes in PBO
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The following information is available for the pension plan of Vaughn Company for the year 2020.
Actual and expected return on plan assets
Â
$Â 14,700
Â
Benefits paid to retirees
Â
40,800
Â
Contributions (funding)
Â
81,100
Â
Interest/discount rate
Â
10
%
Prior service cost amortization
Â
7,600
Â
Projected benefit obligation, January 1, 2020
Â
458,000
Â
Service cost
Â
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…
Projected Benefit Obligation
Balance, January 1, 2024
Service cost
Interest cost, discount rate, 5%
Gain due to changes in actuarial assumptions in 2024
Pension benefits paid
Balance, December 31, 2024
Plan Assets
Balance, January 1, 2024
Actual return on plan assets
(Expected return on plan assets, $49)
Cash contributions
Pension benefits paid
Balance, December 31, 2024
January 1, 2024, balances:
Pension asset
($ in millions)
$ 680
70
34
(18)
(34)
$ 732
($ in millions)
$ 740
44
85
(34)
$ 835
($ in millions)
$ 60
30
124
Prior service cost-AOCI (amortization $6 per year)
Net gain-AOCI (any amortization over 10 years)
Required:
Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension
expense, and the net pension asset.
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. 17.1ECh. 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. 17.14ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 17.1DMPCh. 17 - Prob. 17.2DMPCh. 17 - Prob. 17.3DMPCh. 17 - Prob. 17.5DMPCh. 17 - Prob. 17.6DMPCh. 17 - Prob. 17.8DMPCh. 17 - Prob. 17.9DMPCh. 17 - Prob. 17.11DMPCh. 17 - Prob. 1CCTCCh. 17 - Prob. 2CCTC
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