BuyFindarrow_forward

Intermediate Accounting: Reporting...

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

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

Refer to the information for Spath Company above. In the journal entry to record pension expense, what is the amount of the credit entry to accrue pension cost on December 31?

Chapter 19, Problem 5MC, Refer to the information for Spath Company above. In the journal entry to record pension expense,

To determine

Calculate the amount of accrued pension cost on December 31, 2019 and 2020.

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 accrued pension cost on December 31, 2019 and 2020 as follows:

2019:

Accured pension cost for 2019 = Pension expense for 2019Amount funded=$300,000 (1)$240,000=$60,000 

2020:

Accured pension cost for 2020 = Pension expense for 2020Amount funded=$456,000 (3)$390,000=$66,000 

Therefore, the accrued pension cost on December 31, 2019 and 2020 is $60,000 and $66,000 respectively.

Working note (1):

Calculate the pension expense for 2019.

Pension expense for 2019 = Service cost for 2019 + Interest cost=$300,000+$0=$300,000

Working note (2):

Calculate the interest cost for 2020

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

The labor rate variance is never controllable. Do you agree or disagree? Why?

Managerial Accounting: The Cornerstone of Business Decision-Making

What is inflation and what causes it?

Principles of Microeconomics (MindTap Course List)

Why do economists make assumptions?

Brief Principles of Macroeconomics (MindTap Course List)

AFTER-TAX SALVAGE VALUE Kennedy Air Services is now in the final year of a project. The equipment originally co...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What are the two main causes of market failure? Give an example of each.

Principles of Macroeconomics (MindTap Course List)