Libertines Company sponsors a non-contributory defined benefit pension plan for its employees. The following data relate...

 

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Libertines Company sponsors a non-contributory defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2020 and 2021: 2021 Projected Benefit Obligation, 1/1 Fair Value of Plan Assets, 1/1 Balance in Net Pension Liability/Asset, 1/1 (Unrecognized) AOCI - Prior Service Cost (S/E), 1/1 (Unrecognized) AOCI - Pension Gain/Loss (S/E), 1/1 Service Cost 2020 $1,000,000 850,000 150,000 40,000 120,000 (loss) 80,000 4% 6% 75,000 90,000 $ 75,000 3% 5.5% 50,000 70,000 Discount (Settlement) Rate Expected Rate of Return on Plan Assets Actual Return on Plan Assets Annual Contributions to the Pension Plan at 12/31 Increase in PBO due to decrease in settlement rate (at year-end, 12/31) Payments from the Pension Plan to retirees at 12/31 Average remaining service life of employees Required (hint - it is probably helpful to use worksheets): a. Determine Pension Expense for 2020 and 2021. (8 pts) b. Prepare the journal entry necessary to reflect pension transactions in 2020 and 2021. (6 pts) c. What are the balances in Accumulated OCI - PSC and Accumulated OCI - Pension Gain/Loss at 12/31/20 and 12/31/21, respectively? (2 pts) d. What is the funded status of the plan on 12/31/20 and 12/31/21, respectively? (2 pts) 60,000 70,000 10 years 0 60,000 9 years Libertines Company sponsors a non-contributory defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2020 and 2021: 2021 Projected Benefit Obligation, 1/1 Fair Value of Plan Assets, 1/1 Balance in Net Pension Liability/Asset, 1/1 (Unrecognized) AOCI - Prior Service Cost (S/E), 1/1 (Unrecognized) AOCI - Pension Gain/Loss (S/E), 1/1 Service Cost 2020 $1,000,000 850,000 150,000 40,000 120,000 (loss) 80,000 4% 6% 75,000 90,000 $ 75,000 3% 5.5% 50,000 70,000 Discount (Settlement) Rate Expected Rate of Return on Plan Assets Actual Return on Plan Assets Annual Contributions to the Pension Plan at 12/31 Increase in PBO due to decrease in settlement rate (at year-end, 12/31) Payments from the Pension Plan to retirees at 12/31 Average remaining service life of employees Required (hint - it is probably helpful to use worksheets): a. Determine Pension Expense for 2020 and 2021. (8 pts) b. Prepare the journal entry necessary to reflect pension transactions in 2020 and 2021. (6 pts) c. What are the balances in Accumulated OCI - PSC and Accumulated OCI - Pension Gain/Loss at 12/31/20 and 12/31/21, respectively? (2 pts) d. What is the funded status of the plan on 12/31/20 and 12/31/21, respectively? (2 pts) 60,000 70,000 10 years 0 60,000 9 years

Answer rating: 100% (QA)

Pension Expense for 2020 Service Cost 80000 Interest Cost 60000 Amortization of Prior Service Cost 40000 Total Pension Expense 180000 Pension Expense ... View the full answer