Question

Problem 4. Po em 4. Pension Worksheet-Missing Amounts. The accounting staff of Elias Inc. has prepared the following pension worksheet. Unfortunately, several entries in the workshes are not readable. The company has asked you assistance in completing the worksheet and completine the accounting tasks related to the pension plan for 2017. Pension Cash G/L PBO Asset Liab (225) General Journal Entries Memo Record Pension C O CI OCI- Pension Plan Expense Cash per Assets Balance, 1/1/2017 (1.700) (4,200) Service cost 2,500 (1) (600) Interest cost (2) (420) Actual return (3) 480 Unexpected gain (4) Amortization of PSC (5) (85) Amortization of G/L (6) Contributions (1.200) (7) Benefits paid (8) (300) Liability increase (9) (9) Journal entry (10) (11) (12) (13) (14) Accum. OCI, 12/31/2016 1,700 0 Balance, 12/31/2017 (15) (16 (17) (5,465) (18) Instructions (a) Determine the missing amounts in the 2017 pension worksheet, indicating whether the amounts are debits or credits (b) Prepare the journal entry to record 2017 pension expense for Elias Inc. Problem 5. Pension Worksheet. Howard Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances related to this plan. Plan assets (market-related value) S450,000 Projected benefit obligation 600.000 Prior service cost OCI - Gain 65,000 Average remaining service life in years 10 As a result of the operation of the plan during 2017, the actuary provided the following additional data at December 31. 2017. Service cost for 2017 $75,000 Actual return on plan assets in 2017 45,000 Amortization of prior service cost 20,000 Contributions in 2017 115.000 Benefits paid retirees in 2017 70,000 Settlement rate Expected return rate 8% Instructions (a) Compute pension expense for Howard Corp. for the year 2017 by preparing a pension worksheet. (b) Prepare the journal entry for pension expense. 7%

Answer 1

Service Cost $75000 Interest cost o r $42000 ( 600000X7%) Seruice cost amortisabio $2000 [120000/10) Retum on Plan asset. ($45000) I Deferred gain from plan asset $9000 I pU5000 - ($450000%B7) Expense for pención $65000 Joumal entue's Net pensn expense $72000 Pension liability $72000 To record service cost interest cost and actual petum on plan ariet)

Net Penution expenses $9000 89000 (To defer excess gain of $9000) Net Pension expense $2000. $2000 (To record amortisation of prior service cost)