Tamarisk Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan. Plan assets (market-related value) $474,000 Projected benefit obligation 759,000 Pension asset/liability 285,000 Cr. Prior service cost 84,000 Net gain or loss (debit) 89,000 As a result of the operation of the plan during 2020, the actuary provided the following additional data for 2020. Service cost $107,000 Settlement rate, 9%; expected return rate, 10% Actual return on plan assets 43,000 Amortization of prior service cost 25,000 Contributions 138,000 Benefits paid retirees 93,000 Average remaining service life of active employees 10 years Using the preceding data, compute pension expense for Tamarisk Corp. for the year 2020 by preparing a pension worksheet that shows the journal entry for pension expense. (Enter all amounts as positive.)
Tamarisk Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan. Plan assets (market-related value) $474,000 Projected benefit obligation 759,000 Pension asset/liability 285,000 Cr. Prior service cost 84,000 Net gain or loss (debit) 89,000 As a result of the operation of the plan during 2020, the actuary provided the following additional data for 2020. Service cost $107,000 Settlement rate, 9%; expected return rate, 10% Actual return on plan assets 43,000 Amortization of prior service cost 25,000 Contributions 138,000 Benefits paid retirees 93,000 Average remaining service life of active employees 10 years Using the preceding data, compute pension expense for Tamarisk Corp. for the year 2020 by preparing a pension worksheet that shows the journal entry for pension expense. (Enter all amounts as positive.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 11E
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Question
Problem 20-07
Tamarisk Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan.
As a result of the operation of the plan during 2020, the actuary provided the following additional data for 2020.
Using the preceding data, compute pension expense for Tamarisk Corp. for the year 2020 by preparing a pension worksheet that shows thejournal entry for pension expense. (Enter all amounts as positive.)
Use the market-related asset value to compute the expected return and for corridor amortization.
| Plan assets (market-related value) | $474,000 | ||
| Projected benefit obligation | 759,000 | ||
| Pension asset/liability | 285,000 | Cr. | |
| Prior service cost | 84,000 | ||
| Net gain or loss (debit) | 89,000 |
As a result of the operation of the plan during 2020, the actuary provided the following additional data for 2020.
| Service cost | $107,000 | ||
| Settlement |
|||
| Actual return on plan assets | 43,000 | ||
| Amortization of prior service cost | 25,000 | ||
| Contributions | 138,000 | ||
| Benefits paid retirees | 93,000 | ||
| Average remaining service life of active employees | 10 | years |
Using the preceding data, compute pension expense for Tamarisk Corp. for the year 2020 by preparing a pension worksheet that shows the
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TAMARISK CORP.
Pension Worksheet—2020 |
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General Journal Entries
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Memo Record
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Items
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Annual Pension
Expense |
Cash
|
OCI—Prior
Service Cost |
OCI— Gain/
Loss |
Penison Asset/
Liability |
Projected Benefit
Obligation |
Plan
Assets |
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| Balance, Jan. 1, 2020 |
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
$
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Dr.Cr.
|
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
||||||||
| Service cost |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Interest cost |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Actual return |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Unexpected loss |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Amortization of PSC |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Amortization of loss |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Contributions |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Benefits |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Journal entry for 2020 |
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||
| Accumulated OCI, Dec. 31, 2019 |
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
|
Dr.Cr.
|
||||||||||||
| Balance, Dec. 31, 2020 |
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
$
|
Dr.Cr.
|
Use the market-related asset value to compute the expected return and for corridor amortization.
| Expected return |
$
|
|
| Corridor amortization |
$
|
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