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On January 1, 2019, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,200,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2019: Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following arc the amounts of the components of Baznik’s pension expense, in addition to the amortization of the prior service cost for 2019 and 2020: Baznik contributed $850,000 and $830,000 to the pension fund at the end of 2019 and 2020, respectively. Required: 1. Next Level Prepare a set of schedules for Baznik to determine (a) the amortization fraction for each year and (b) the amortization of the prior service cost. 2. Next Level Prepare all the journal entries related to Baznik’s pension plan for 2019 and 2020.

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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 9P
Textbook Problem

On January 1, 2019, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,200,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2019:

Chapter 19, Problem 9P, On January 1, 2019, Baznik Company adopted a defined benefit pension plan. At that time, Baznik , example  1

Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following arc the amounts of the components of Baznik’s pension expense, in addition to the amortization of the prior service cost for 2019 and 2020:

Chapter 19, Problem 9P, On January 1, 2019, Baznik Company adopted a defined benefit pension plan. At that time, Baznik , example  2

Baznik contributed $850,000 and $830,000 to the pension fund at the end of 2019 and 2020, respectively.

Required:

  1. 1. Next Level Prepare a set of schedules for Baznik to determine (a) the amortization fraction for each year and (b) the amortization of the prior service cost.
  2. 2. Next Level Prepare all the journal entries related to Baznik’s pension plan for 2019 and 2020.

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Chapter 19 Solutions

Intermediate Accounting: Reporting And Analysis
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