Send the link below via email or IMCopy
Present to your audienceStart remote presentation
- Invited audience members will follow you as you navigate and present
- People invited to a presentation do not need a Prezi account
- This link expires 10 minutes after you close the presentation
- A maximum of 30 users can follow your presentation
- Learn more about this feature in our knowledge base article
Do you really want to delete this prezi?
Neither you, nor the coeditors you shared it with will be able to recover it again.
Make your likes visible on Facebook?
Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.
Transcript of Exercise 11
1. The actuarial present value of future benefits earned by employees for services rendered in 2014 amounted to $56,000
2. The company's funding policy requires a contribution to the pension trustee amounting to $145,000 for 2014
3. As of January 1, 2014, the company had a projected benefit obligation of $900,000, an accumulated benefit obligation of $800,000, and a debit balance of $400,000 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $600,000 at the beginning of the year. The actual and expcected return on plan assets was $54,000. The settlement rate was 9%. No gains or losses occured in 2014 and no benefits were epaid.
4. Amortization of prior service cost was $50,000 in 2014. Amortization of net gain or loss was not required in 2014.
Determine the amount of pension expense
Interest Cost ($900,000 x 9%)
Expected return on plan assets
Amortization of prior service expense
Prepare the journal entry to record pension expense and the employer's contribution to the pension trustee in 2014
Pension Expense 133,000
Pension Asset Liability* 62,000
Other Comprehensive Income (PSC) 50,000
* ($133,000 - $145,000 - $50,000)
Indicate the amounts that would be reported on the income statement and the balance sheet for the year 2014
Pension Expense $133,000
Comprehensive Income Statement
Net Income XXX
Other Comprehensive Income (Amortization PSC) $50,000
Pension Liability ($1,037,000 - $799,000) $238,000
Accumulated OCI Beginning Balance $400,000
Amortization of prior service cost ($50,000)
Accumulated OCI Ending Balance