Preparing and Recording Pension Entries and Preparing Pension Worksheet The following data relate to a pension...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Preparing and Recording Pension Entries and Preparing Pension Worksheet The following data relate to a pension plan for ISPN Inc. Account Balances Projected Benefit Obligation Plan Assets Accumulated OCI-Pension Gain/Loss Accumulated OCI-Prior Service Cost Activity Service cost Contributions Prior service cost amortization. Expected return on plan assets Actual return on plan assets Date Dec. 31, 2020 Pension Expense Jan. 1, 2020 $30,000 Cr. 2020 $7,000 9,000 1,000 2,000 3,000 Journal Entries Financial Statement Presentation Pension Worksheet a. Provide the entries related to the defined pension plan for 2020 assuming a discount rate of 8%. Amortize Accumulated OCI-Pension Gain/Loss using the straight-line method over 15 years. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Dec. 31, 2020 Plan Assets 30,000 Dr. 5,000 Cr 8,000 Dr. Account Name OCI-Prior Service Cost OCI-Pension Gain/Loss Cash Accrued Pension Liability To record pension expense Dec. 31, 2020 OCI-Prior Service Cost Cash Cashi To record plans funding ◆ ◆ ♦ + To record deferral of unexpected gain on plan assets + ♦ + ◆ Dr. 0 0 0 0 0 0 0 0 0 Cr. 0 0 0 0 0 0 0 0 0 b. Assuming pension expenses are not capitalized as part of inventory or other assets, indicate the effect on the income statement for the year ended December 31, 2020. . Note: Do not use a negative sign with your answers. • Note: Round your answers to the nearest whole dollar. Income Statement For the Year Ended December 31, 2020 Operating expenses $ Nonoperating expenses $ c. Indicate the changes in balance sheet accounts between January 1 and December 31, 2020. Assets Plan assets increase $ Cash decrease Assets net increase $ Liablities PBO increase $ 0 0 0 0 0 0 Equity Retained earnings decrease (pension expense) $ AOCI increase Equity net decrease $ 0 0 0 d. Create a worksheet to summarize the pension data at the end of 2020. • Note: Round your answers to the nearest whole dollar. Reported Net In Financial Statements Balance, January 1, 2020 Service cost Interest cost Expected return Unexpected gain on plan assets Prior service cost amortization Pension gain/loss amortization Contributions to fund Balance, December 31, 2020 $ $ Plan Assets 0 $ 0 0 0 0 0 0 0 0 $ PBO 0 0 0 0 0 0 Reported on Balance Sheet Accumulated OCI Net Pension Prior Pension Asset/Liability Service Cost Gain/Loss 0 $ 0 0 $ 0 0 0 $ 0 $ 0 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 $ 0 0 $ 0 0 0 0 0 0 0 Cash Outflow 0 $ 0 0 0 0 0 Reported in Comprehensive Income 0 $ Pension Expense Pension Prior Service Cost Gain/Loss 0 $ 0 0 OCI 0 0 0 0 0 $ 0 $ 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 0 0 Preparing and Recording Pension Entries and Preparing Pension Worksheet The following data relate to a pension plan for ISPN Inc. Account Balances Projected Benefit Obligation Plan Assets Accumulated OCI-Pension Gain/Loss Accumulated OCI-Prior Service Cost Activity Service cost Contributions Prior service cost amortization. Expected return on plan assets Actual return on plan assets Date Dec. 31, 2020 Pension Expense Jan. 1, 2020 $30,000 Cr. 2020 $7,000 9,000 1,000 2,000 3,000 Journal Entries Financial Statement Presentation Pension Worksheet a. Provide the entries related to the defined pension plan for 2020 assuming a discount rate of 8%. Amortize Accumulated OCI-Pension Gain/Loss using the straight-line method over 15 years. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Dec. 31, 2020 Plan Assets 30,000 Dr. 5,000 Cr 8,000 Dr. Account Name OCI-Prior Service Cost OCI-Pension Gain/Loss Cash Accrued Pension Liability To record pension expense Dec. 31, 2020 OCI-Prior Service Cost Cash Cashi To record plans funding ◆ ◆ ♦ + To record deferral of unexpected gain on plan assets + ♦ + ◆ Dr. 0 0 0 0 0 0 0 0 0 Cr. 0 0 0 0 0 0 0 0 0 b. Assuming pension expenses are not capitalized as part of inventory or other assets, indicate the effect on the income statement for the year ended December 31, 2020. . Note: Do not use a negative sign with your answers. • Note: Round your answers to the nearest whole dollar. Income Statement For the Year Ended December 31, 2020 Operating expenses $ Nonoperating expenses $ c. Indicate the changes in balance sheet accounts between January 1 and December 31, 2020. Assets Plan assets increase $ Cash decrease Assets net increase $ Liablities PBO increase $ 0 0 0 0 0 0 Equity Retained earnings decrease (pension expense) $ AOCI increase Equity net decrease $ 0 0 0 d. Create a worksheet to summarize the pension data at the end of 2020. • Note: Round your answers to the nearest whole dollar. Reported Net In Financial Statements Balance, January 1, 2020 Service cost Interest cost Expected return Unexpected gain on plan assets Prior service cost amortization Pension gain/loss amortization Contributions to fund Balance, December 31, 2020 $ $ Plan Assets 0 $ 0 0 0 0 0 0 0 0 $ PBO 0 0 0 0 0 0 Reported on Balance Sheet Accumulated OCI Net Pension Prior Pension Asset/Liability Service Cost Gain/Loss 0 $ 0 0 $ 0 0 0 $ 0 $ 0 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 $ 0 0 $ 0 0 0 0 0 0 0 Cash Outflow 0 $ 0 0 0 0 0 Reported in Comprehensive Income 0 $ Pension Expense Pension Prior Service Cost Gain/Loss 0 $ 0 0 OCI 0 0 0 0 0 $ 0 $ 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 0 0
Expert Answer:
Answer rating: 100% (QA)
a Journal Entries Date Account Name Debit Credit December 31 2020 Pension Expense 7000 0 OCIPrior Se... View the full answer
Posted Date:
Students also viewed these accounting questions
-
The following data relate to a pension plan for Cobain, Inc. January 1, 2020 General Ledger balances: Projected Benefit Obligation $90,000 Cr. Plan Assets $90,000 Dr. Accumulated OCIPension Gain/Loss...
-
The following data relate to a $100,000,000, 12% bond issue for a selected semiannual interest period: Bond carrying amount at beginning of period $112,085,373 Interest paid during period 6,000,000...
-
The following data relate to a $200,000,000, 5% bond issued for a selected semiannual interest period: Bond carrying amount at beginning of period .....$216,221,792 Interest paid during period...
-
What impact does this have on the statement of cash flows using the indirect method? a.) If the balance of a current liability decreases during the accounting period, then that amount will be...
-
Identify each of the following variables as categorical or quantitative. a. Number of pets in family b. County of residence c. Choice of auto to buy (domestic or import) d. Distance (in kilometers)...
-
If Bad Frog had sought to use the label to market toys instead of beer, would the courts ruling likely have been the same? Explain your answer. FACTS Bad Frog Brewery, Inc., makes and sells alcoholic...
-
At present, 10-year Treasury bonds are yielding 5 percent, while a 10-year corporate bond is yielding 7 percent. If the liquidity-risk premium on the corporate bond is 0.5 percent, what is the...
-
The preinduction physical examination given by the U.S. Army involves the following seven activities: Average Time Activity (min) Medical history .................. 10 Blood tests ......................
-
1.Which of the following is an advantage of implementing just-in-time inventory management? Pick 1 option The frequency of raw materials deliveries is reduced Monthly finance costs incurred in...
-
I. THE CASE 0 n February 15, 2019, the Chief Operating Officer of Larson Industries, Pete Moreen, announced a major step forward for the company: Today, we have entered into an agreement to sell our...
-
Add or subtract these rational expressions. Show your common denominators and numerators on this sheet or separate paper. FACTOR denominators when possible. 1. 53 8 8x 2 7 2. 4x+12 x+31
-
How can the principles of systems thinking and system analysis be effectively applied to optimize the operations and management of a warehouse facility?
-
Use the blank table below to help you determine the standard deviation for the following stocks. Stock A will return a rate of 12% in a recession. 15% in normal conditions and 18% during a boom. The...
-
Carrot the cat likes taking naps in one of four locations: the rug, the bed, the ledge, and the sink. Carrot has the following conditions: He will not sleep in the sink twice in a row He will sleep...
-
Based on the Bursa Malaysia's Listing Requirements, discuss the obligation of a listed issuer to comply on matters of related party transaction and also discuss and explain Audit Committee Review ,...
-
You are evaluating a project with an initial investment of $9.6 million, and equal expected cash flows of $5.1 million per year for years 1 to 5. What is this projects simple payback? The corporate...
-
D Milagros belongs to a very distinct South American tribe. Bravery is very important in her tribe. From an early age, all boys and girls are taught that bravery is akin to being a member of the...
-
You are interested in investing and are considering a portfolio comprised of the following two stocks. Their estimated returns under varying market conditions are provided: (note: it is difficult to...
-
Consider each of the following issues and discuss whether you support Theory X, Theory Y, neither theory, or some combination of them. Issue Theory X Theory Y Whether a person is healthy or sick...
-
Some people argue that the government should not intervene in the case of a market failure because the government itself is inefficient and will simply create new problems to replace the ones it is...
-
Governor Sophia is in a quandary. She believes everyone should have access to health care and would like to support state policies that make care accessible and affordable. While she supported...
Study smarter with the SolutionInn App