Question

The following facts apply to the pension plan of Yorke Inc. for the year 2011:
Plan assets, Jan. 1, 2011 .................... $490,000
Accrued benefit obligation, funding basis, Jan. 1, 2011 ....... 389,000
Accrued benefit obligation, accounting basis, Jan. 1, 2011 ...... 490,000
Interest and expected earnings rate .............. 8.5%
Annual pension service cost ................. 40,000
Contributions (funding) ................... 30,000
Actual return on plan assets ................. 49,700
Benefits paid to retirees .................... 33,400
Instructions
(a) Calculate pension expense for the year 2011, and provide the entries to recognize the pension expense and funding for the year assuming that the deferral and amortization approach is adopted.
(b) Discuss what adjustments would need to be made to your calculation in part (a) if the immediate recognition approach were adopted instead. Provide calculations wherever possible.


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  • CreatedAugust 23, 2015
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