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Verna Company has had a defined benefit pension plan for several years. At the end of 2019, Verna accumulated the following information: (1) service cost for 2019, $127,000; (2) projected benefit obligation, 1/1/2019, $634,000; (3) discount rate, 9%; (4) plan assets. 1/1/2019, $589,000; and (5) expected long term rate of return on plan assets, 9%. There are no other components of Verna’s pension expense. Verna had an accrued/prepaid pension cost liability at the end of 2018. Verna contributed $128,000 to the pension plan at the end of 2019. Required: Compute the amount of Verna’s pension expense for 2019 and prepare the related journal entry.

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

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

Solutions

Chapter
Section
Chapter 19, Problem 4E
Textbook Problem

Verna Company has had a defined benefit pension plan for several years. At the end of 2019, Verna accumulated the following information: (1) service cost for 2019, $127,000; (2) projected benefit obligation, 1/1/2019, $634,000; (3) discount rate, 9%; (4) plan assets. 1/1/2019, $589,000; and (5) expected long term rate of return on plan assets, 9%. There are no other components of Verna’s pension expense. Verna had an accrued/prepaid pension cost liability at the end of 2018. Verna contributed $128,000 to the pension plan at the end of 2019.

Required:

Compute the amount of Verna’s pension expense for 2019 and prepare the related journal entry.

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Chapter 19 Solutions

Intermediate Accounting: Reporting And Analysis
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