Question

Exercise 20-11 (Part Level Submission) Larkspur Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. 2. The company's funding policy requires a contribution to the pension trustee amounting to $137,228 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation of s899,100, an accumulated benefit obligation of $797,300, and a debit balance of 5398,900 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $597,300 at the beginning of the year. The actual and expected retum on plan assets was $54,000. The settlement rate was 8%. No gains or losses occurred in 2020 and no benefits were pald. 4. Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. Your answer is correct. Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense T Service Cost 55,800 Interest on Projected Benefit Obligation 71,928 Expected Return on Plan Assets (54000) Amortization of Prior Service Cost 505001 I Pension Expense 124,228

Answer 1

Component of pension expense and journal entry is already correctly solved.

solving for the income statement, Comprehensive Income Statement, and balance sheet.

Larkspur Company Income Statement (Partial) For the year ended December 31, 2020 Expenses Pension Expense 124228 Larkspur Company Comprehensive Income Statement For the year ended December 31, 2020 Net Income (Loss) Other Comprehensive Income Amortization of PSC Comprehensive Income $XXXX 50500 $XXXX Larkspur Company Balance Sheet (Partial) 31-Dec-20 Long-term Liabilities Pension Liability Stockholders' Equity Accumulated Other Comprehensive Income (PSC) 238300 348400

WORKINGS FOR BALANCE SHEET- 1. Stockholders' equity Accumulated OCI (PSC) Jan. 1. 2020 Amortization of prior service cost Accumulated OCI (PSC) Dec 31, 2020 398900 50500 348400 2. Pension Liability Partial worksheet- Plan Assets 597300 Projected Benefit 899100 55800 71928 Bal. January 1, 2020 Service cost Interest on PBO Actual return Contribution Bal. December 31, 2020 54000 137228 788528 1026828 Projected benefit obligation Plan assets Pension liability 1026828 788528 238300