14. Computation of 2017 adjustment for gain/loss :- | |||
Unexpected loss/(gain) on plan assets for 2017 | $ (2,500) | ||
Loss on PBO for assumption changes | $ 3,500 | ||
Amortization of Net Loss | $ (2,188) | ||
2017 adjustment for gain/loss | $ (1,188) | ||
15. Computation of 2017 amortization of Prior Service Cost:- | |||
Prior Service Costs incurred beginning of 2016 | $ 40,000 | ||
Average remaining service years of employees | 4 years | ||
2017 Amortization of Prior Service Cost ($40000/4) | $ 10,000 | ||
Pension Worksheet- 2017 | |||||||
Memo Record | General Journal Entries | ||||||
PROJECTED BENEFIT OBLIGATION | PLAN ASSET | Prior Service Cost-AOCI | Net Loss (Gain)-AOCI | Annual Pension Expense | Cash | Pension Asset/ Liability | |
Balance, Jan 1, 2017 | $ (350,000) | $ 250,000 | $ 30,000 | $ 43,750 | $ (100,000) | ||
Service cost | $ (40,000) | $ 40,000 | $ (40,000) | ||||
Interest cost,3% (350000*3%) | $ (10,500) | $ 10,500 | $ (10,500) | ||||
Expected return on assets (250000*3%) | $ 7,500 | $ (7,500) | $ 7,500 | ||||
Adjust for: | $ - | ||||||
Gain on assets (250000*4%=10000-7500) | $ 2,500 | $ (2,500) | $ 2,500 | ||||
Loss on PBO for assumption changes | $ (3,500) | $ 3,500 | $ (3,500) | ||||
Amortization of Prior Service Cost (40000/4) | $ (10,000) | $ 10,000 | $ - | ||||
Amortization of Net Loss | $ (2,188) | $ 2,188 | $ - | ||||
Contributions | $ 44,000 | $ (44,000) | $ 44,000 | ||||
Retiree Benefits | $ 45,000 | $ (45,000) | $ - | ||||
Balance, Dec 31, 2017 | $ (359,000) | $ 259,000 | $ 20,000 | $ 42,563 | $ 55,188 | $ (44,000) | $ (100,000) |
Computation of unexpected loss/(gain) on assets for the year 2017:- | |||
Expected return on the plan assets (250000*3%) | $ 7,500 | ||
Less: Actual return on the plan assets (250000*4%) | $ 10,000 | ||
Unexpected loss/(gain) on plan assets for 2017 | $ (2,500) | ||
Computation of amount of loss to be amortized from OCI-loss Account in 2017:- | |||
a. Net loss-AOCI beginning | $ 43,750 | ||
Projected Benefit Obligation, beginning | $ 350,000 | ||
Plan Assets, beginning | $ 250,000 | ||
Higher value | $ 350,000 | ||
b. Corridor =10% of $350000 | $ 35,000 | ||
c. Excess at the beginning of the year (a-b) | $8,750 | ||
d. Average remaining service period | 4 years | ||
e. loss amortized to current year pension expense (c/d) | $2,188 |
Computation of Pension Expense for 2017:- | |||
Service cost | $ 40,000 | ||
Interest cost | $ 10,500 | ||
Expected return on the plan assets | $ (7,500) | ||
Amortization of past service cost | $ 10,000 | ||
Amortization of net loss | $ 2,188 | ||
Pension Expense | $ 55,188 | ||
Journal entry | |||
Account Titles and Explanation | Debit | Credit | |
Pension Expense | $ 55,188 | ||
Cash | $ 44,000 | ||
OCI-PSC | $ 10,000 | ||
OCI - loss | $ 1,188 | ||
(To record pension expense) |
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SE THE FOLLOWING INFORMATION FOR #11 - 20 Interest (Cost) Rate Expected rate of return on...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH $ 120,000 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40.000 S 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% 120,000 $ e beginning of 2017 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40,000 $ $ 3.500 (45,000) Projected benefit obligation at the...
USE THE FOLLOWING INFORMATION FOR # 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 49% $ 120,000 e beginning of 2017 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year S $ 350,000 40,000 $ $ 3.500 (45,000) Projected benefit obligation at the...
Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH $ 120,000 $ 350,000 $ 40,000 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year 3,500 (45,000) $ Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the year Actual return...
Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% $ 120,000 $ 40,000 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the year Actual...
3% Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 120,000 $ $ Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year 350,000 40,000 $ $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the year...
Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH 3% 3% 4% 120,000 Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year $ $ 350,000 40,000 $ $ 3,500 (45,000) Projected benefit obligation at the end of 2017 $ 250,000 Plan assets at the beginning of the...
USE THE FOLLOWING INFORMATION FOR 11-20 Interest (Cost) Rate Expected rate of return on plan assets Actual rate of return on plan assets Beginning of year balance in CASH Projected benefit obligation at the beginning of 2017 Service cost, 2017 Interest Cost Loss (gain) on PBO for assumption changes Less: Benefits paid to retirees during the year Projected benefit obligation at the end of 2017 Plan assets at the beginning of the year Actual return on plan assets Cash contributions...
10.) Calculate the total prior service cost using the following information. Write your answer on the cover sheet. $ FACTS: The company has a defined benefit plan Seth's salary at the end of 2017 Retirement expected after Retirement period is expected to be Interest Rate 145,000 45 20 4.0% years of service years Benefits are calculated as a formula as the product of: Service already provided Percentage Final year's salary is projected to be 15 years 2.0% $ 263,000 AFTER...
Exercise 20-10 (Part Level Submission) Novak Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan. Plan assets Projected benefit obligation Pension asset/liability Accumulated OCI (PSC) $469,800 607,000 137,200 97,100 Dr. As a result of the operation of the plan during 2017, the following additional data are provided by the actuary. Service cost $91,100 Settlement rate, 8% Actual return on plan assets Amortization of prior service cost Expected return...