Manchester City maintains a defined benefit pension plan for its employees. In a recent year, the city

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Manchester City maintains a defined benefit pension plan for its employees. In a recent year, the city contributed $15 million to its pension fund. However, its annual pension expense and increase in net pension liability as calculated by its actuary was $32 million. The city accounts for the pension contributions in the general fund.

Required

1. Record the pension expenditure and related liability in the general fund and account group.

2. Suppose that in the following year the city contributed $20 million to its pension fund, but its annual pension expense and increase in net pension liability per its actuary was only $18 million. Prepare the appropriate journal entries.

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Advanced Accounting

ISBN: 978-1305084858

12th edition

Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng

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