2. Purdue Company sponsors a defined benefit pension plan for its employees. The following data relate...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2. Purdue Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018. Purdue Company's defined benefit pension plan covers 230 employees. After negotiating with and granted $200,000 of additional benefits to its employees. The amortization the employee union, Purdue Company amended its pension plan on January 1, 2016, for you (see table below). Based on the demographics of Purdue Company's employees, required is based off of the years-of-service method, which has already been calculated the company groups its employees into the following retirement buckets: Amortization Required for Years-of-Service Method 2016 $ 71,875.00 2017 $ 62,500.00 2018 $ 45,312.50 2019 $ 20,312.50 $ 200,000.00 PBO January 1 Plan assets January 1 Funded stats January 1 Prior service cost January 1 Service cost Settlement rate Expected return on plan assets Actual return on plan assets Contributions Benefits paid to retirees Increase in PBO due to change in actuarial assumptions ABO 12/31 Average service life of all employees VBO 12/31 2017 $ 550,000 $ 375,000 $ (175,000) $ 140,000 $ 50,000 $ 10% 10% $ $ $ 35,000 $ 80,000 $ 35,000 $ 2018 54,000 10% 10% 58,000 72,000 38,000 $ 95,000 $ 683,200 $ 705,300 4 years $ 325,000 Prepare the journal entries to reflect all pension plan transactions and events at December 31 of each year. Hint: Don't forget to test for the Corridor Assumption; it's sneaky! 2. Purdue Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018. Purdue Company's defined benefit pension plan covers 230 employees. After negotiating with and granted $200,000 of additional benefits to its employees. The amortization the employee union, Purdue Company amended its pension plan on January 1, 2016, for you (see table below). Based on the demographics of Purdue Company's employees, required is based off of the years-of-service method, which has already been calculated the company groups its employees into the following retirement buckets: Amortization Required for Years-of-Service Method 2016 $ 71,875.00 2017 $ 62,500.00 2018 $ 45,312.50 2019 $ 20,312.50 $ 200,000.00 PBO January 1 Plan assets January 1 Funded stats January 1 Prior service cost January 1 Service cost Settlement rate Expected return on plan assets Actual return on plan assets Contributions Benefits paid to retirees Increase in PBO due to change in actuarial assumptions ABO 12/31 Average service life of all employees VBO 12/31 2017 $ 550,000 $ 375,000 $ (175,000) $ 140,000 $ 50,000 $ 10% 10% $ $ $ 35,000 $ 80,000 $ 35,000 $ 2018 54,000 10% 10% 58,000 72,000 38,000 $ 95,000 $ 683,200 $ 705,300 4 years $ 325,000 Prepare the journal entries to reflect all pension plan transactions and events at December 31 of each year. Hint: Don't forget to test for the Corridor Assumption; it's sneaky!
Expert Answer:
Answer rating: 100% (QA)
ANSWER Pension Work Sheet Negative sign indicates Credits Positive Sign indicates Debits Items Bala... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0470616314
IFRS edition volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
Students also viewed these accounting questions
-
Glesen Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2010 and 2011. Instructions (a) Prepare a pension...
-
Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2020 and 2021. Instructions a. Prepare a pension...
-
8. [25 POINTS] Tim Turner Enterprises sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2019. Plan assets, at fair value,...
-
Currently the rate of return of the risk-free government bond is 3% while the expected rate of return on the market is 11%. Using CAPM, calculate the rate of return required for A plc who has a beta...
-
Construct the Barron Pizza Inc. income statement for the year ending 2011 with the following information: Shares outstanding: 16,740,000 Tax rate: 37.5% Interest expense: $6,114 Revenue: $889,416...
-
Which statement is true? a) Labor unions are much more powerful today than they were 50 years ago. b) Strikes have caused great economic disruption in recent years. c) There have been no lockouts...
-
List an advisor's duties that are excluded under the AICPA's Statements on Standards for Tax Services.
-
Weighted-average method, equivalent units. Consider the following data for the Assembly Division of Fenton Watches, Inc.: The Assembly Division uses the weighted-average method of process costing.
-
Global Corp. initially projected the 2019 income statement shown in the table Suppose that in 2019, Global launched an aggressive marketing campaign that boosted 2019 sales further by 15.8%. However,...
-
Prepare the Annual Reconciliation of Employer Wage Tax for Philadelphia, using the blank. For lines 1, 3, and 4, use gross wages and salaries per general ledger less exempt wages paid to Russell...
-
Fund X has 100 stocks in its portfolio. The weights of the first 50 stocks in the fund's portfolio are 0.5% each. The weights of the second 50 stocks in the fund's portfolio are 1.5% each. The weight...
-
A. Describe each of the three components in the AIM planning process for business messages: audience analysis, idea development, and message structuring. B. Explain the general nature of excellence...
-
Identify the needs of your audience in the AIM planning process.
-
Develop effective slide presentations.
-
Identify how generational, gender, and other aspects of diversity affect workplace communication.
-
Organize and gather content for a preview, view, and review.
-
Operating margin is the same as gross margin in CVP analysis. True False
-
Using the information presented in Problem 13.4B, prepare a partial statement of cash flows for the current year, showing the computation of net cash flows from operating activities using the...
-
If the bonds in question 6 are classified as trading and they have a fair value at December 31, 2010, of $3,604,000, prepare the journal entry (if any) at December 31, 2010, to record this...
-
What are the different bases for share valuation when assets other than cash are received for issued shares?
-
On September 1, 2010, Lin Company sold at 104 (plus accrued interest) 30,000 of its 8%, 10-year, 10,000 face value, non-convertible bonds with detachable share warrants. Each bond carried two...
-
Describe the process of valuing the entrepreneurs ownership interest in a two-stage investment. Refer to Tables 13.10 and 13.13. Data from table 13.10 Data from table 13.13 Market potential...
-
Euro Exchange Rates. The exchange rate that we consider is the amount of euros that one can purchase for one U.S. dollar. We have \(T=699\) daily observations from the period April 1, 2005, through...
-
Evaluate the current yield curve level and structure using the following screens: a. YCRV or GC to access yield curves. b. FWCV to determine implied forward rates. c. USoo03M, USoo06M, USoo09M, and...
Study smarter with the SolutionInn App