Question

Tommy Inc. sponsors a defined-benefit pension plan. The corporation's actuary provides the following information about the plan. 1-Jan-2019 31-Dec-2019 Projected benefit obligation 810,000 Plan assets 740,000 Accumulated OCI (PSC)-Dr. 312,000 ? Accumulated OCI (G/L)-Dr. 120,000 Settlement & expected return rate 896 Service cost 155,000 Contributions (funding) 200,500 Actual return on plan assets 54,400 Benefits paid to retirees 180,000 Average service life of all covered employees in years 10 Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one thousand is 1,000, not 1000. No $ sign. No positive or negative sign. 2. If no entry is required, write N/A. 3. Only use the following accounts: Cash, Pension expense, OCI-PSC, OCI-G/L, Pension asset/liability 4. Copy account names accurately to receive credits, names are not case sensitive.

Answer 1

Compute Pension expense for 2019 26 a) 27 28 29 155,000 64,800 30 31 32 Service cost Interest cost (810000*8%) Actual Return-Plan assets +/- Unexpected G/L Expected return PSC Amortization G/L Amortization Total Pension expense 59,200 31,200 3,900 195,700 33 34 35 36 Year Plan assets Corridor @10% Projected Benefit Obligation 37 38 Cummulative Unrecognized (Gain or loss 120,000 Minimum amortization of (gain) Loss 3,900 2019 810,000 $740,000 81000 39 40 41 b) 42 Prepare the Journal entry for pension expense for 2019 43 44 45 195,700 120,900 280,800 Pension Expense Dr. OCI - G/L Dr. OCI-PSC Dr. Cash Cr. Pension Asset / Liability Cr. To record nension evnense and emnlover's contribution 46 200,500 396,900 47 48