Homework Answers
1.)
interest cost = 8% of 51,800 = .08 x 511800 =40944
Annual pension epense a/c ...dr 40,944
to project benefit obligation a/c 40,944
so, you are required to change the amount to 40,944
2)First 2 Boxes appearing in front of "journal entry, December 31" row belong to next row (as you can see these are underlined by double lines.) your answer of cash (cr.) 23,500 is correct and it belongs to next to the row.
So, in front of "journal entry, December 31" row, following entry must be passed (net profit or loss is transferres to pension asset /liability account)
Annual pension expense ......dr 3,644
to pension asset/ liability 3,644
(expenses(36,500+40,944)-(50,300+23500)income=(3,644)amount writen above)
3) In the last row of "Balance, December 31, 2017, following will be the amounts, that is the total of the above entries.
Annual pension expense Dr 23,500
Cash Cr 23,500
Pension Asset/ Liability Dr 3,644
Projected Benefit Obligation Cr 555,844
Plan Assets Dr 552,200
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