On January 1, 2019, Smith Company adopted a defined benefit pension plan. At that time, Smith awarded retroactive benefits to its employees, resulting in a prior service cost that created a projected benefit obligation of $1,250,000 on that date (which it did not fund). Smith decided to amortize the prior service cost by the straight-line method over the 20-year average remaining service life of its active participating employees. Smith’s actuary has also provided the following additional information for 2019 and 2020: (1) service cost: 2019, $147,000; 2020, $153,000; (2) expected (and actual) return on plan assets: 2020, $33,000; and (3) projected benefit obligation: 1/1/2020, $1,522,000. The discount rate was 10% in both 2019 and 2020. Smith contributed $330,000 and $350,000 to the pension fund at the end of 2019 and 2020, respectively. There are no other components of Smith's pension expense.
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Accounting Information Systems
Financial Accounting
Financial & Managerial Accounting
Managerial Accounting: The Cornerstone of Business Decision-Making
College Accounting, Chapters 1-27
Financial And Managerial Accounting
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