Question: Pebble City maintains a dened benet pension plan for its employees. In a recent year, the citys consulting actuary calculated that the citys annual pension

Pebble City maintains a deﬁned beneﬁt pension plan for its employees. In a recent year, the city’s consulting actuary calculated that the city’s annual pension cost for the year was $6 million. Its determination was consistent with the GASB-speciﬁed parameters. The city records 50 percent of its payroll in its general fund and 50 percent in an enterprise fund.
1. During the year the city contributed the entire $6 million to the pension fund. Prepare the pension journal entries that the city should make to record its pension contribution, expenditure or expense, and obligation (if any) in all applicable funds (excluding the pension plan itself).
2. Assume the city contributed only $5.6 million. Prepare the appropriate journal entries.
3. How can you justify the differences in the reported expenditures/expense between the two funds?

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