Question

Exercise 20-07

The following defined pension data of Sweet Corp. apply to the year 2020.

Projected benefit obligation, 1/1/20 (before amendment)		$569,000
Plan assets, 1/1/20		556,100
Pension liability		12,900
On January 1, 2020, Sweet Corp., through plan amendment,    grants prior service benefits having a present value of		120,000
Settlement rate		9	%
Service cost		57,300
Contributions (funding)		63,800
Actual (expected) return on plan assets		52,300
Benefits paid to retirees		37,700
Prior service cost amortization for 2020		16,200

For 2020, prepare a pension worksheet for Sweet Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

Answer 1

А В D Е Н K M Journal Entry General Journal Entries Memo Record Projected Annual Gain Pension Asset/ Benefit Pension Prior Service /Loss Liability Accounts Title and Explanation 3 Items Cash obligation Plan Assets Debit Expense Cost Date Credit $-12,900.00 $ -5,69,000.00 $ 5,56,100.00 $ -1,20,000.00 $ -6,89,000.00 $83,210.00 Dec 31, 2020 Pension Expense 4 Dec 31, 2019 $1,20,000.00 Other Comprehensive Income (Prior Service Cost) $1,03,80o.00 Prior Service Costs 5 Pension Asset/ Liability 6 Bal Jan 01, 2020 5,56,100.00 $1,23,210.00 $ 57,300.00 $ 62,010.00 S-52,300.00 $ 16,200.00 -57,300.00 $ $ 7 Service Costs Cash 63,800.00 Interest Costs -62,010.00 $ 52,300.00 Assets Return $ -16,200.00 10 Amortisation PSC $-63,800.00 $ 11 Contributions 63,800.00 $ 37,700.00 $ 12 Benefits Paid to retirees -37,700.00 $ 83,210.00 $-63,800.00 $1,03,800.00 $1,03,800.00 13 Journal entry $-1,23,210.00 $-1,36,110.00 $ -7,70,610.000 $ 6,34,500.00 14 Dec 31, 2020 N

А В D Е G Н Memo Record General Journal Entries Prior Service Cost Gain / Loss Pension Asset/ Liability Projected Benefit obligation Annual Pension Expense Cash Plan Assets 3 Items 4 Dec 31, 2019 5 Prior Service Costs -12900 -569000 556100 -120000 120000 -SUM(H4:H5) 6 Bal Jan 01, 2020 =SUM(G4:G5) 7 Service Costs -57300 57300 --G6*9% 8 Interest Costs -B8 9 Assets Return -52300 52300 10 Amortisation PSC -16200 16200 11 Contributions 63800 -63800 12 Benefits Paid to retirees -37700 37700 -SUM (B4:B12) 13 Journal entry =SUM(C4:C12) =SUM(D4:D12) -SUM(B13:D13) -SUM (F4: F13) =SUM(G6:G12) =SUM(H6:H12) 14 Dec 31, 2020 D13

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