Homework Answers
Schedule of amortization of prior service costs using years of service method
| A | B | C = Prior cost / 1,200 | D = B x C | |
| Year | No of employees retire during the year | No of employees worked during the year | Cost per service year | Amortization |
| 2016 | 40 | 400 | 5,000 | 2,000,000 |
| 2017 | 120 | (400 - 40) 360 | 5,000 | 1,800,000 |
| 2018 | 60 | (360 - 120) 240 | 5,000 | 1,200,000 |
| 2019 | 160 | (240 - 60) 180 | 5,000 | 900,000 |
| 2020 | 20 | (180 - 120) 20 | 5,000 | 100,000 |
| 1,200 | 6,000,000 | |||
Notes:
Cost per service year = Prior costs / Sum of number of employees worked during every year
= $6,000,000 / 1,200 = $5,000
Add Answer to:
Problem 3. Amortization of prior service cost using years-of-service method. On January 1, 2016, Solano Incorporated...
(6) I expense to be reported on the income statement for 2017 Prepare the journal entries...
(6) I expense to be reported on the income statement for 2017 Prepare the journal entries to record pension expense for 2017. Problem 3. Amortization of prior service cost using years-of-service method. On January 1, 2016. Solano Incorporated amended its pension plan which caused an increase of $6,000,000 in its projected benefit obligation. The company has 400 employees who are expected to receive benefits under the company's defined benefit pension plan. The personnel department provided the following information regarding expected...
6,000,000 Ilussets at fair value) 1,600,000 Expected return on plan assets Settlement rate Instructions (a) Compute...
6,000,000 Ilussets at fair value) 1,600,000 Expected return on plan assets Settlement rate Instructions (a) Compute the pension expense recognized in 2017. Assume the prior service cost is amortized over the average remaining service life of the employees. (b) Prepare the journal entries to reflect accounting for the company's pension plan for the year ended December 31, 2017. (c) Indicate the amounts that are reported on the income statement and the balance sheet for 2017. 9% 8% Problem 2. Measuring...
1. Prior service cost 2. Prior service cost amortization Service cost 3. Interest cost 5. Pension...
1. Prior service cost 2. Prior service cost amortization Service cost 3. Interest cost 5. Pension expense 4. Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary...
Methods to Amortize Prior Service Cost Wolz Company, a small business, has had a defined benefit...
Methods to Amortize Prior Service Cost Wolz Company, a small business, has had a defined benefit pension plan for its employees for several years. At the beginning of 2016, Wolz amended the pension plan; this amendment provides for increased benefits based on services rendered by certain employees in prior periods. Wolz's actuary has determined that the related prior service cost amounts to $140,000. Wolz has four participating employees who are expected to receive increased benefits. The following is a schedule...
On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik a...
On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,200,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016: Employee Expected Years of Future...
E20-5 (L03) (Application of Years-of-Service Method) Andrews Company has five employees participating in its defined benefit...
E20-5 (L03) (Application of Years-of-Service Method) Andrews Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2017 are as follows. Future Employee Years of Service Tim Paul Nancy Dave Kathy On January 1, 2017, the company amended its pension plan, increasing its projected benefit obligation by $72,000, 1164 Chapter 20 Accounting for Pensions and Postretirement Benefits Instructions Compute the amount of prior service cost amortization for...
Skysong Company has five employees participating in its defined benefit pension plan. Expected years of future...
Skysong Company has five employees participating in its defined
benefit pension plan. Expected years of future service for these
employees at the beginning of 2017 are as follows.
Employee
Future Years of Service
Jim
3
Paul
4
Nancy
5
Dave
6
Kathy
6
On January 1, 2017, the company amended its pension plan,
increasing its projected benefit obligation by $82,800.
Compute the amount of prior service cost amortization for the years
2017 through 2022 using the years-of-service method, setting up...
Waddle Company amended its defined benefit pension plan on January 1, 2024, to increase retirement benefits earned with each service year. The actuary estimated the prior service cost to be $216,000. Waddle's 80 present employees are expected to retire at
Waddle Company amended its defined benefit pension plan on January 1, 2024, to increase retirement benefits earned with each service year. The actuary estimated the prior service cost to be $216,000. Waddle's 80 present employees are expected to retire at the rate of about 10 each year at the end of each of the next eight years.Required:Using the service method, calculate the amount of prior service cost to be amortized to pension expense in 2024.Using the straight-line method, calculate the...
Question 24 Tamarisk Company has five employees participating in its defined benefit pension plan. Expected years...
Question 24 Tamarisk Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2017 are as follows. Employee Future Years of Service Jim Paul 4. Nancy Dave 6 Kathy On January 1, 2017, the company amended its pension plan, increasing its projected benefit obligation by $80,640. Compute the amount of prior service cost amortization for the years 2017 through 2022 using the years-of-service method, setting up appropriate...
The pension plan was amended last year, creating a prior service cost of $180 million. Service cost and interest cost f...
The pension plan was amended last year, creating a prior service cost of $180 million. Service cost and interest cost for the year were $46 million and $22 million, respectively. At the end of the year, there was a negligible balance in the net gain-pensions account. The actual return on plan assets was $22 million although it was expected to be $24 million. On average, employees' remaining service life with the company is 15 years. Complete the below table to...
(6) I expense to be reported on the income statement for 2017 Prepare the journal entries to record pension expense for 2017. Problem 3. Amortization of prior service cost using years-of-service method. On January 1, 2016. Solano Incorporated amended its pension plan which caused an increase of $6,000,000 in its projected benefit obligation. The company has 400 employees who are expected to receive benefits under the company's defined benefit pension plan. The personnel department provided the following information regarding expected...
6,000,000 Ilussets at fair value) 1,600,000 Expected return on plan assets Settlement rate Instructions (a) Compute the pension expense recognized in 2017. Assume the prior service cost is amortized over the average remaining service life of the employees. (b) Prepare the journal entries to reflect accounting for the company's pension plan for the year ended December 31, 2017. (c) Indicate the amounts that are reported on the income statement and the balance sheet for 2017. 9% 8% Problem 2. Measuring...
1. Prior service cost 2. Prior service cost amortization Service cost 3. Interest cost 5. Pension expense 4. Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years x final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary...
E20-5 (L03) (Application of Years-of-Service Method) Andrews Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2017 are as follows. Future Employee Years of Service Tim Paul Nancy Dave Kathy On January 1, 2017, the company amended its pension plan, increasing its projected benefit obligation by $72,000, 1164 Chapter 20 Accounting for Pensions and Postretirement Benefits Instructions Compute the amount of prior service cost amortization for...
Skysong Company has five employees participating in its defined
benefit pension plan. Expected years of future service for these
employees at the beginning of 2017 are as follows.
Employee
Future Years of Service
Jim
3
Paul
4
Nancy
5
Dave
6
Kathy
6
On January 1, 2017, the company amended its pension plan,
increasing its projected benefit obligation by $82,800.
Compute the amount of prior service cost amortization for the years
2017 through 2022 using the years-of-service method, setting up...
Question 24 Tamarisk Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2017 are as follows. Employee Future Years of Service Jim Paul 4. Nancy Dave 6 Kathy On January 1, 2017, the company amended its pension plan, increasing its projected benefit obligation by $80,640. Compute the amount of prior service cost amortization for the years 2017 through 2022 using the years-of-service method, setting up appropriate...
The pension plan was amended last year, creating a prior service cost of $180 million. Service cost and interest cost for the year were $46 million and $22 million, respectively. At the end of the year, there was a negligible balance in the net gain-pensions account. The actual return on plan assets was $22 million although it was expected to be $24 million. On average, employees' remaining service life with the company is 15 years. Complete the below table to...
Most questions answered within 3 hours.
-
Can someone explain the process of this Display a text
file program and show the supposed...
asked 11 minutes ago -
When a solid dissolves in water, heat may be evolved or
absorbed. The heat of dissolution...
asked 14 minutes ago -
Leechtown Co. has 4.3 percent coupon bonds on the market with 18
years left to maturity....
asked 16 minutes ago -
Comment on how the conference could have been improved What
additional elements would you consider adding...
asked 25 minutes ago -
Sandra Clothing Company has invested $51,000,000 in its
business. The target rate of return for the...
asked 25 minutes ago -
"Discover the privacy concerns when applying Artificial
Intelligence into Big Data"
asked 26 minutes ago -
Explain why organisms that can survive and/or grow under aerobic
conditions need the enzymes catalase and...
asked 32 minutes ago -
Moonwalker Corporation issued 2,000 shares of its $10 par value
common stock for $60,000. Moonwalker also...
asked 31 minutes ago -
A microphone connected to an amplifier takes a 10 dB voice and
turns it into a...
asked 36 minutes ago -
Suppose the mean time spent by all Harper College students
preparing for final exams is believed...
asked 51 minutes ago -
Imagine you are examining the effects of smoking in
heart-disease death rates. You collect an SRS...
asked 53 minutes ago -
Use the price-demand equation to find E(p), the elasticity of
demand.
x=f(p)=150 - 55 ln(p)
E(p)...
asked 48 minutes ago