Pearl Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2016, with the
Question:
Pearl Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2016, with the following beginning balances: plan assets $197,300; projected benefit obligation $245,000. Other data relating to 3 years’ operation of the plan are as follows.
2016 2017 2018
Annual service cost $15,900 $18,900 $26,300
Settlement rate and expected rate of return 10 % 10 % 10 %
Actual return on plan assets 18,100 21,760 24,000
Annual funding (contributions) 15,900 39,800 47,100
Benefits paid 13,700 16,300 21,300
Prior service cost (plan amended, 1/1/17) 160,400
Amortization of prior service cost 55,000 42,300
Change in actuarial assumptions establishes a December 31, 2018,
projected benefit obligation of: 525,600
A). Prepare a pension worksheet presenting all 3 years’ pension balances and activities. (Enter all amounts as positive.)
B). Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield