Clark Kent Co. approved a prior service obligation of $120,000 on January 1, 2020, which granted...
Clark Kent Co. approved a prior service obligation of $120,000 on January 1, 2020, which granted retroactive benefit to employees. Assuming an average remaining service period of 10 years for all active plan participants, what is the effect on pension expense of the prior service cost?
Note: Indicate a decrease with a negative sign.
Increase (decrease) to pension expense:
Homework Answers
If there is an approval for prior service obligation which grants a retroactive benefit to employees, then the cost of such service is to be distributed over the remaining service period.
Given,
Prior service obligation approved by Clark Kent Co. = $120,000
Average remaining service period assumed = 10 years
The effect on pension expense of the prior service cost = $120,000 / 10 years = $12,000
Therefore, increase to pension expense for the current year: $12,000
Add Answer to:
Clark Kent Co. approved a prior service obligation of $120,000
on January 1, 2020, which granted...
On January 1, 2020, McGee Co. had the following balances: Projected benefit obligation
On January 1, 2020, McGee Co. had the following balances: Projected benefit obligation $7,400,000 Fair value of plan assets 7,000,000 Other data related to the pension plan for 2020: Service cost 315,000 Contributions to the plan 459,000 Benefits paid 450,000 Actual return on plan assets 444,000 Settlement rate 9% Expected rate of return 6% Average service periods (for amortization) 8yrs (a) Determine the projected benefit obligation at December 31, 2020. There...
Problem 3. Amortization of prior service cost using years-of-service method. On January 1, 2016, Solano Incorporated...
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 employee retirements: Number of Employees Expected Retirements on December 31 40 2016 120 2017 60 2018 160 2019 2020 400 The company...
Sweet Corp. sponsors a defined benet pension plan for its employees. On January 1, 2020, the...
Sweet Corp. sponsors a defined benet pension plan for its employees. On January 1, 2020, the following balances related to this plan Plan assets (market-related value Prajected benefit obligation Pension asset/liability Prior service cost Nct gain or loss (dcbit) $522,000 738,000 216,000 Cr. 83,000 99,000 As a result of the aperation of the plan during 2020, the actuary provided the following additional data for 2020 $97,000 Service cost Settlement rate, 9%, expected retumrate, 10% Actual return on plan assets Amortization...
Chapter 20 - Pensions On January 1, 2011, Newlin Co. has the following balances: Projected benefit obligation $1,60...
Chapter 20 - Pensions On January 1, 2011, Newlin Co. has the following balances: Projected benefit obligation $1,600,000 credit balance Pension is $300,000 underfunded at Jan 1, 2011 oCI- G/L has a debit balance of $250,000 on Jan 1, 2011 Additional information: Service life of employees is 50 years The settlement rate is 8%. Other data related to the pension plan for 2011 are: $280,000 Amortization of prior service costs due to increase in benefits 75,000 105,000 300,000 237,000 245,000...
Sheridan Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 1997. Prior...
Sheridan Inc. has sponsored a noncontributory, defined benefit
pension plan for its employees since 1997. Prior to 2020,
cumulative net pension expense recognized equaled cumulative
contributions to the plan. Other relevant information about the
pension plan on January 1, 2020, is as follows.
1.
The company has 200 employees. All these employees are expected
to receive benefits under the plan. The average remaining service
life per employee is 12 years.
2.
The projected benefit obligation amounted to $4,903,000 and the...
On January 1, 2016, Flash and Dash Company adopted a healthcare plan for its retired employees....
On January 1, 2016, Flash and Dash Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The following information is available about the plan: Service cost $30,000 Accumulated postretirement benefit obligation (1/1/16) 120,000 Expected return on plan assets 0 Amortization of Prior service cost 10,000 Payments to retired employees during 2016 5,000 Interest rate 10% Average remaining service period of active plan...
On January 1, 2018, Sandhill Co. has the following balances: Projected benefit obligation $ 5200000 Fair value of plan...
On January 1, 2018, Sandhill Co. has the following balances: Projected benefit obligation $ 5200000 Fair value of plan assets 4600000 The settlement rate is 9%. Other data related to the pension plan for 2018 are: Service cost $316000 70000 Amortization of prior service costs Contributions 356000 Benefits paid 331000 348000 Actual return on plan assets Amortization of net gain 23600 The balance of the projected benefit obligation at December 31, 2018 is $5653000. $5668000 $5494000 $5984000
On January 1,...
Pension Worksheet die sau co the year 2014 Service Cost Contribution to the plan Prior service...
Pension Worksheet die sau co the year 2014 Service Cost Contribution to the plan Prior service cost amortization Actual and expected return on plan assets Benefits paid Plan assets at January 1, 2014 Projected benefit obligation, January 1,2014 Accumulated OCI (PSC), January 1, 2014 Interest/discount (settlement rate) $210,000 263,000 35,000 123,000 220,000 1,440,000 1,800,000 325,000 9% v/ Prepare a pension worksheet inserting January 1, 2014, balances, showing December 31, 2014 balances and the journal entry recording pension expense. Pla
Brief Exercise 20-05 Blossom Corporation amended its pension plan on January 1, 2020, and granted $165,900...
Brief Exercise 20-05 Blossom Corporation amended its pension plan on January 1, 2020, and granted $165,900 of prior service costs to its employees. The employees are expected to provide 2,100 service years in the future, with 310 service years in 2020. Compute prior service cost amortization for 2020. Prior service cost amortization for 2020 Click if you would like to Show Work for this question: Open Show Work
The following amounts are associated with Rockhill Farms Company’s pension plan for the year 2020: Plan...
The following amounts are associated with Rockhill Farms Company’s pension plan for the year 2020: Plan Assets Jan 1, 2020: $750,000 Projected benefit obligation Jan 1, 2020: 750,000 Settlement rate 5% Service Cost 56,000 Contributions 20,000 Actual and expected returns on assets 50,000 Benefits paid to retirees 62,000 What is the journal entry for the 2020 pension expense? Show your work. Debit- Pension Expense $43,500, Credit- Pension Liability $23,500, Cash $20,000 Debit- Pension Expense...
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 employee retirements: Number of Employees Expected Retirements on December 31 40 2016 120 2017 60 2018 160 2019 2020 400 The company...
Sweet Corp. sponsors a defined benet pension plan for its employees. On January 1, 2020, the following balances related to this plan Plan assets (market-related value Prajected benefit obligation Pension asset/liability Prior service cost Nct gain or loss (dcbit) $522,000 738,000 216,000 Cr. 83,000 99,000 As a result of the aperation of the plan during 2020, the actuary provided the following additional data for 2020 $97,000 Service cost Settlement rate, 9%, expected retumrate, 10% Actual return on plan assets Amortization...
Chapter 20 - Pensions On January 1, 2011, Newlin Co. has the following balances: Projected benefit obligation $1,600,000 credit balance Pension is $300,000 underfunded at Jan 1, 2011 oCI- G/L has a debit balance of $250,000 on Jan 1, 2011 Additional information: Service life of employees is 50 years The settlement rate is 8%. Other data related to the pension plan for 2011 are: $280,000 Amortization of prior service costs due to increase in benefits 75,000 105,000 300,000 237,000 245,000...
Sheridan Inc. has sponsored a noncontributory, defined benefit
pension plan for its employees since 1997. Prior to 2020,
cumulative net pension expense recognized equaled cumulative
contributions to the plan. Other relevant information about the
pension plan on January 1, 2020, is as follows.
1.
The company has 200 employees. All these employees are expected
to receive benefits under the plan. The average remaining service
life per employee is 12 years.
2.
The projected benefit obligation amounted to $4,903,000 and the...
On January 1, 2018, Sandhill Co. has the following balances: Projected benefit obligation $ 5200000 Fair value of plan assets 4600000 The settlement rate is 9%. Other data related to the pension plan for 2018 are: Service cost $316000 70000 Amortization of prior service costs Contributions 356000 Benefits paid 331000 348000 Actual return on plan assets Amortization of net gain 23600 The balance of the projected benefit obligation at December 31, 2018 is $5653000. $5668000 $5494000 $5984000
On January 1,...
Pension Worksheet die sau co the year 2014 Service Cost Contribution to the plan Prior service cost amortization Actual and expected return on plan assets Benefits paid Plan assets at January 1, 2014 Projected benefit obligation, January 1,2014 Accumulated OCI (PSC), January 1, 2014 Interest/discount (settlement rate) $210,000 263,000 35,000 123,000 220,000 1,440,000 1,800,000 325,000 9% v/ Prepare a pension worksheet inserting January 1, 2014, balances, showing December 31, 2014 balances and the journal entry recording pension expense. Pla
Brief Exercise 20-05 Blossom Corporation amended its pension plan on January 1, 2020, and granted $165,900 of prior service costs to its employees. The employees are expected to provide 2,100 service years in the future, with 310 service years in 2020. Compute prior service cost amortization for 2020. Prior service cost amortization for 2020 Click if you would like to Show Work for this question: Open Show Work
Most questions answered within 3 hours.
-
convert grams into vloume with the density of water being at
.997514 g/cm^3 at 23.1 Celsuis...
asked 2 minutes ago -
Foreman company obtained a $20,000, 6% loan on May 1, 2018.
Principal and interest will be...
asked 6 minutes ago -
5. Problem 11.05 (Discounted Payback)
eBook
Project L costs $60,000, its expected cash inflows are $14,000
per...
asked 34 minutes ago -
1. Which of the following is true about politics and health
organizations?
A. Health organizations are...
asked 59 minutes ago -
A space vehicle is coasting at a constant velocity of 18.1 m/s
in the +y direction...
asked 2 hours ago -
5) Use the following balanced equation to answer questions
(a)-(i).
3 Cu(s) + 8 HNO3(aq) →...
asked 1 hour ago -
A three-year maturity bond with a 12% annual coupon rate is
currently traded at par $1000...
asked 1 hour ago -
1.
What is the minimum volume to use in the Spec 20 cuvette in order
to...
asked 2 hours ago -
A builder wants to install wall-to-wall carpeting in a living
room of length 8.87 m and...
asked 2 hours ago -
Organizational change can produce anxiety in those affected by
the change. In what ways can change...
asked 2 hours ago -
Ozone in the atmosphere may react with nitric oxide.
From the following data, calculate the DG...
asked 2 hours ago -
Steven Long, a bond analyst, is analyzing a convertible bond.
The characteristics of the bond are...
asked 2 hours ago