Latoya Company provides the following selected information related to its defined benefit pension plan for 2020. Pension

Question:

Latoya Company provides the following selected information related to its defined benefit pension plan for 2020.

Pension asset/liability (January 1)..............................................$ 25,000 Cr.
Accumulated benefit obligation (December 31).......................400,000
Actual and expected return on plan assets.................................10,000
Contributions (funding) in 2020..................................................150,000
Fair value of plan assets (December 31)....................................800,000
Settlement rate....................................................................................10%
Projected benefit obligation (January 1)....................................700,000
Service cost......................................................................................80,000

Instructions

a. Compute pension expense and prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. Preparation of a pension worksheet is not required. Benefits paid in 2020 were $35,000.

b. Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2020.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...

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