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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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On December 31, 2019, Robey Company accumulated the following information for 2019 in regard to its defined benefit pension plan:

Chapter 19, Problem 2E, On December 31, 2019, Robey Company accumulated the following information for 2019 in regard to its

On its December 31, 2018, balance sheet, Robey had reported an accrued/prepaid pension cost liability of $14,000.

Required:

  1. 1. Compute the amount of Robey’s pension expense for 2019.
  2. 2. Prepare all the journal entries related to Robey’s pension plan for 2019 if it funds the pension plan in the amount of (a) $108,000, (b) $107,000, and (c) $112,000.
  3. 3. Next Level Assuming Robey’s beginning 2019 Accumulated Other Comprehensive Income: Prior Service Cost balance was $60, 000 what would be its ending balance?
  4. 4. Next Level How much would Robey need to fund its pension plan for 2019 in order to report an accrued/prepaid pension cost asset of $5,000 at the end of 2019?

1.

To determine

Calculate the amount of pension expense of Company R for 2019.

Explanation

Pension plan: Pension plan is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Calculate the amount of pension expense of Company R for 2019 as follows:

ParticularsAmounts in ($)
Service cost$105,000

2.

To determine

Prepare necessary journal entries of Company R for 2019, if company R funds the pension plant in the amount of (a) $108,000, (b) 107,000 and (c) $112,000.

3.

To determine

Calculate the ending balance of accumulated other comprehensive income: prior service cost account, assume that the beginning balance of the account is $60,000.

4.

To determine

Calculate the amount of pension fund needed in order to report an accrued/prepaid pension cost of $5,000 at the end of 2019.

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