ACC 423 Week 5 Final Exam 2 Chapter 20

Brief Exercise 20-8

Windsor Corporation has the following balances at December 31, 2017.

Projected benefit obligation

########

Plan assets at fair value

########

Accumulated OCI (PSC)

$995,000

What is the amount for pension liability that should be reported on Windsor's balance sheet at December 31, 2017?

Exercise 20-1

The following information is available for the pension plan of Marigold Company for the year 2017.

Actual and expected return on plan assets

14,100

Benefits paid to retirees

41,400

Contributions (funding)

90,300

Interest/discount rate

10%

Prior service cost amortization

8,000

Projected benefit obligation, January 1, 2017

523,000

Service cost

54,600

Instructions

a) compute pension expense for the year 2012

b) prepare the journal entries to record pension expense and the employer's contribution to the pension plan

Exercise 20-12

Shamrock Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2017.

Jan 1 2017

Dec 31 2017

Projected benefit obligation

########

########

Market-related and fair value of plan assets

791,000

1,121,100

Accumulated benefit obligation

1,585,000

1,706,400

Accumulated OCI (G/L)—Net gain 

0

-198,600

The service cost component of pension expense for employee services rendered in the current year amounted to

$79,000

and the amortization of prior service cost was

$121,400

. The company’s actual funding (contributions) of the plan in 2017 amounted to

$251,000

. The expected return on plan assets and the actual rate were both

10%

; the interest/discount (settlement) rate was

10%

 Accumulated other comprehensive income (PSC) had a balance of

########

on January 1, 2017. Assume no benefits paid in 2017.

a. Determine the amounts of the components of pension expense that should be recognized by the company in 2017. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

b. Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

c. Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Shamrock Company for the year 2017.

Exercise 20-5

Employee

Future Years of Service

Jim

3

Paul

4

Nancy

5

Dave

6

Kathy

6