Homework Answers
| Computation of Pension Expense for the year 2018 | |||
| Service cost | $ 60,000 | ||
| Interest cost | (320000*5%) | $ 16,000 | |
| Expected return on the plan assets | (2200000*8%) | $ (36,000) | |
| Amortization of past service cost | (40000*1/10) | $ 4,000 | |
| Pension Expense | $ 44,000 | ||
| Lee Electronics Inc. | ||||||||||||
| Pension Worksheet- 2018 | ||||||||||||
| General Journal Entries | Memo Record | |||||||||||
| Items | Annual Pension Expense | Cash | OCI-Prior Service Cost | Pension Asset/ Liability | Projected Benefit Obligation | Plan Assets | ||||||
| Balance, Jan 1, 2018 | $ 28,000 | Dr. | $ 80,000 | Dr. | $ 320,000 | Cr. | $ 400,000 | Dr. | ||||
| Service cost | $ 60,000 | Dr. | $ 60,000 | Cr. | ||||||||
| Interest cost (320000*5%) | $ 16,000 | Dr. | $ 16,000 | Cr. | ||||||||
| Actual and Expected return (400000*9%) | $ 36,000 | Cr. | $ 36,000 | Dr. | ||||||||
| Amortization of PSC (40000*1/10) | $ 4,000 | Dr. | $ 4,000 | Cr. | ||||||||
| Contributions | $ 120,000 | Cr. | $ 120,000 | Dr. | ||||||||
| Benefits | $ 44,000 | Dr. | $ 44,000 | Cr. | ||||||||
| Journal entry for 2018 | $ 44,000 | Dr. | $ 120,000 | Cr. | $ 4,000 | Cr. | $ 80,000 | Dr. | ||||
| Accumulated OCI, Dec.31, 2017 | $ 28,000 | Dr. | ||||||||||
| Balance, Dec 31, 2018 | $ 24,000 | Dr. | $ 160,000 | Dr. | $ 352,000 | Cr. | $ 512,000 | Dr. | ||||
| Journal entry | |||
| Account Titles and Explanation | Debit | Credit | |
| Pension Expense | $ 44,000 | ||
| Pension Asset/ Liability | $ 80,000 | ||
| OCI-PSC | $ 4,000 | ||
| Cash | $ 120,000 | ||
| (To record pension expense) |
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