Answer-
Computation of pension expense:
Service cost..............................................................$ 99,000
Interest cost ($761,000 X 9%)...............................68,490
Expected return on plan assets............................. (64,700)
Prior service cost amortization.............................. 3,100
Pension expense for 2010.......................................$105,890
Sunland company
Postretirement Benefit Worksheet
JOURNAL ENTRIES | MEMO RECORD | |||||||
ITEMS | ANNUAL POSTRETIREMENT EXPENSE | CASH | OCI PRIOR SERVICE COST | POSTRETIREMENT ASSET / LIABILITY | APBO | PLAN ASSETS | ||
BALANCE , JAN 1, 2017 | 49,600 CR | 761,000 CR | 711,400 DR | |||||
SERVICE COST | 99,000 DR | 99,000 CR | ||||||
INTEREST COST * |
68,490 DR |
68,490 CR | ||||||
ACTUAL RETURN** | 64,700 CR | 64,700 DR | ||||||
AMORTIZATION OF PSC | 3,100 DR | 3,100 CR | ||||||
CONTRIBUTION | 56,900 CR | 56,900 DR | ||||||
BENEFITS | 38,400 DR | 38,400 CR | ||||||
JOURNAL ENTRY FOR 2017*** | 105,890 DR | 56,900 CR | 3,100 CR | 45,890 CR | ||||
ACCUMULATED OCI, DEC 31 2016 | 93,100 DR | |||||||
BAL DEC .31, 2017 | 90,000 DR | 95,490 CR | 890,090 CR | 794,600 DR | ||||
* 68,490 = 761000*9% ***Pension Expense..........................................................105,890 ***Pension Asset/Liability.................................................45,890 Other Comprehensive Income (PSC)....................3,100 Cash..............................................................56,900 |
Exercise 20-23 Sunland Co. provides the following information about its postretirement benefit plan for the year...
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