The following information is available for the pension plan of Radcliffe Company for the year 2020. Actual
Question:
The following information is available for the pension plan of Radcliffe Company for the year 2020.
Actual and expected return on plan assets.....................$ 15,000
Benefits paid to retirees........................................................40,000
Contributions (funding).........................................................90,000
Interest/discount rate................................................................10%
Prior service cost amortization...............................................8,000
Projected benefit obligation, January 1, 2020..................500,000
Service cost.............................................................................60,000
Instructions
a. Compute pension expense for the year 2020.
b. Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020.
Expected ReturnThe 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: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel