AC 302 Chapter 20 Problem Question 4

AC 302 Chapter 20 Problem Question 4
Name				Date		
Instructor				Course		
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield						
Primer on Using Excel in Accounting by Rex A Schildhouse						
						
P20-4 (Pension Expense, Journal Entries for 2 Years) Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2012 and 2013.						
						
					2012	2013
	Plan assets (fair value), December 31				$699,000 	$849,000 
	Projected benefit obligation, January 1				700,000 	800,000 
	Pension asset/liability, January 1				(140,000)	?
	Prior service cost, January 1				250,000 	240,000 
	Service cost				60,000 	90,000 
	Actual and expected return on plan assets				24,000 	30,000 
	Amortization of prior service cost				10,000 	12,000 
	Contributions (funding)				115,000 	120,000 
	Accumulated benefit obligation, December 31				500,000 	550,000 
	Interest/settlement rate				9%	9%
						
Instructions:						
(a) Compute pension expense for 2012 and 2013.						
						
Computation of pension expense:						
				2012	2013	
Service cost				Amount	Amount	
Interest cost				Formula	Amount	
Expected return on plan assets				Amount	Amount	
Amortization of prior service cost				Amount	Amount	
Pension expense				Formula	Formula	
						
"(b) Prepare the journal entries to record the pension expense and the company's funding of the
     pension plan for both years."						
						
						
			2012			
Pension Asset/Liability			Amount			
Pension Expense			Amount			
Other Comprehensive Income (PSC)				Amount		
Other Comprehensive Income (G&L)				Amount		
Cash				Amount		
					2013	
Pension Expense					Amount	
Cash						Amount
Pension Asset/Liability						Amount
Other Comprehensive Income (PSC)						Amount