Question

Question 8 --/5 View Policies Current Attempt in Progress Cheyenne Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $197,800; projected benefit obligation $252,000. Other data relating to 3 years' operation of the plan are as follows. Annual service cost Settlement rate and expected rate of return Actual return on plan assets Annual funding (contributions) Benefits paid Prior service cost (plan amended, 1/1/20) Amortization of prior service cost Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 2019 $15,800 10% 17,700 15,800 13,900 2020 $19,300 10% 21,740 39,700 16,100 161,100 2021 $26,000 10 % 24,100 47,300 21,200 54,200 41,000 522,400

Answer 1

CHYENNE COMPANY Pension Worksheet 2019,2020,2021 General Entries Memo Record Project Benefit Obiligation 252,000 Cr. OCI Prior Service Annual Pension Pension OCI-Gain/Loss Asset/Liabilities 54,200 Cr Cash Plan Assets Items Expense Cost Balance Jan.1,2019 197,800 Dr. 15,800 Dr 25,200 Dr. 17,700 Cr 2,080 Cr. 15,800 Cr Service Cost 25,200 Cr. Interest Cost Actual Return 17,700 Dr. Unexpected Loss 2,080 Dr. 15,800 Dr. 13,900 Cr. 15,800 Cr. Contributions Benefits 13,900 Dr. 21.220 Dr. Journal Entry for 2019 7,500 Cr. 15,800 Cr. 2,080 Dr. Accumulated OCI Dec 31, 2018 Balance Dec 31, 2019 2,080 Dr. 61,700 Cr 279,100 Cr 217,400 Dr Additional PSc, 1/1/2020 161,100 Dr 161,100 Cr Balance Jan 1, 2020 440,200 Cr Service Cost 19,300 Dr. 19,300 Cr 44,020 Dr 21,740 Cr. 54,200 Dr 44,020 Cr Interest Cost Actual Return Amortization of PSC 21,740 Dr. 54,200 Cr. 39,700 Dr. 39,700 Cr. Contributions Benefits 16,100 Dr. 16,100 Cr 106,900 Dr. 95,780 Dr. 39,700 Cr 162,980 Cr Journal Entry for 2020 Accumulated OCI Dec 31, 2019 2,080 Dr. 224,680 Cr. 487,420 Cr. 262,740 Dr. Balance Dec 31, 2020 106,900 Dr. 2,080 Dr.

26.000 Dr. 26,000 Cr. Service Cost Interest Cost Actual Return Unexpected Loss 48,742 Cr. 48,742 Dr. 24.100 Dr 24,100 Cr 2,174 Dr. 2,174 Cr Amortization of PSC 41.000 Dr. 41,000 Cr. Contributions 47,300 Cr. 47,300 Dr. Benefits Liability Gain 21,200 Cr. 21,200 Dr. 18,562 Dr 18,562 Cr 89,468 Dr. 47,300 Cr. 41,000 Cr 15,220 Dr 16,388 Cr Journal Entry for 2021 Accumulated OCI Dec 31, 2020 106,900 Dr. 2,080 Dr. 65,900 Dr. 14,308 Cr 209.460 Cr. 312,940 Dr. Balance Dec 31, 2021 522,400 Cr

Working Notes: 1) Interest Cost = (Projected Benefit obligation at the beginning of year x Interest rate) 2019 (252,000 x 10%) 25,200 2020 (440,200 x 10%) 44,020 2021 (487,420 x 10%) 48,742 2) Unexpected Loss (Expected Return - Actual Return) Expected Return (Plan Assets at the beginning x Expected Return) 2019 Expected Return (197,800 x 10 %) Actual Return 19,780 (17,700) Unexpected loss 2,080 2020 Expected Return (217,400 x 10%) 21,740 (21,740) Actual Return Unexpected loss /(Gain) 2021 Expected Return = (262,740 x 10%) Actual Return Unexpected loss /(Gain) 26,274 (24,100) 2,174 Calculation of Liability Gain Projected Benefit obligation as per acturial assumption Less: Projected Benefit obligation as on 01/01/18 Less: Service cost 2021 Less: Interest cost 2021 522,400 (487,420) (26,000) (48,742) Add: Benefits paid 2021 Liability Gain 21,200 (18,562)