Vice Oil received the following selected information from its pension plan trustee concerning the operation of the
Question:
Vice Oil received the following selected information from its pension plan trustee concerning the operation of the company’s defined-benefit pension plan for the year ended December 31, 2014.
The service cost component of pension expense for employee services rendered in the current year amounted to $225,000 and the amortization of prior service cost was $200,000. The company’s actual funding (contributions) of the plan in 2014 amounted to $156,000. The expected return on plan assets and the actual rate were both 8%; the interest/discount (settlement) rate was 8%. Accumulated OCI (PSC) had a balance of $3,200,000 on January 1, 2014. Assume no benefits paid in 2014.
Instructions
(a) Determine the amounts of the components of pension expense that should be recognized by the company in 2014.
(b) Prepare the journal entries to record pension expense and the employer’s contribution to the pension plan in 2014.
(c) Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Vice Oil for the year2014.
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...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield