Problem 20-3
Gottschalk Company sponsors a defined benefit plan for its 100employees. On January 1, 2014, the companyâs actuary provided thefollowing information.
Accumulated other comprehensive loss (PSC) $155,100 Pension plan assets (fair value and market-related assetvalue) 200,400 Accumulated benefit obligation 268,500 Projected benefit obligation 380,600
The average remaining service period for the participatingemployees is 10 years. All employees are expected to receivebenefits under the plan. On December 31, 2014, the actuarycalculated that the present value of future benefits earned foremployee services rendered in the current year amounted to $53,400;the projected benefit obligation was $495,500; fair value ofpension assets was $277,200; the accumulated benefit obligationamounted to $367,600. The expected return on plan assets and thediscount rate on the projected benefit obligation were both 10%.The actual return on plan assets is $11,400. The companyâs currentyearâs contribution to the pension plan amounted to $65,400. Nobenefits were paid during the year.
Determine the components of pension expense that the companywould recognize in 2014.
Components of Pension Expense
Service Cost - 53,400
Interest on Projected Benefit Obligation - 38,060
Actual Return on Plan Assets - (11,400)
Unexpected Loss - (8,640)
Amortization of Gain or Loss - 0
Amortization of Prior Service Cost - 15,510
Pension Expense - 86,930
Prepare the journal entry to record the pension expense and thecompanyâs funding of the pension plan in 2014
Other Comprehensive Income (G/L) -
Pension Expense -
Cash -
Pension Asset/Liability -
Other Comprehensive Income (PSC) -
Compute the amount of the 2014 increase/decrease in gains orlosses and the amount to be amortized in 2014 and 2015.
2014 Increase/Decrease in _____________ $_____________
Amortization in 2014
Amortization in 2015
Indicate the pension amounts reported in the financial statementas of December 31, 2014.
Gottschalk Company Income Statement (Partial) For the year endedDcember 31, 2014
$
Gottschalk Company Comprehensive Income Statement December 31,2014
Gottschalk company Balance Sheer (Partial) December 31, 2014
Problem 20-3
Gottschalk Company sponsors a defined benefit plan for its 100employees. On January 1, 2014, the companyâs actuary provided thefollowing information.
| Accumulated other comprehensive loss (PSC) | $155,100 | |
| Pension plan assets (fair value and market-related assetvalue) | 200,400 | |
| Accumulated benefit obligation | 268,500 | |
| Projected benefit obligation | 380,600 |
The average remaining service period for the participatingemployees is 10 years. All employees are expected to receivebenefits under the plan. On December 31, 2014, the actuarycalculated that the present value of future benefits earned foremployee services rendered in the current year amounted to $53,400;the projected benefit obligation was $495,500; fair value ofpension assets was $277,200; the accumulated benefit obligationamounted to $367,600. The expected return on plan assets and thediscount rate on the projected benefit obligation were both 10%.The actual return on plan assets is $11,400. The companyâs currentyearâs contribution to the pension plan amounted to $65,400. Nobenefits were paid during the year.
Determine the components of pension expense that the companywould recognize in 2014.
Components of Pension Expense
Service Cost - 53,400
Interest on Projected Benefit Obligation - 38,060
Actual Return on Plan Assets - (11,400)
Unexpected Loss - (8,640)
Amortization of Gain or Loss - 0
Amortization of Prior Service Cost - 15,510
Pension Expense - 86,930
Prepare the journal entry to record the pension expense and thecompanyâs funding of the pension plan in 2014
Other Comprehensive Income (G/L) -
Pension Expense -
Cash -
Pension Asset/Liability -
Other Comprehensive Income (PSC) -
Compute the amount of the 2014 increase/decrease in gains orlosses and the amount to be amortized in 2014 and 2015.
2014 Increase/Decrease in _____________ $_____________
Amortization in 2014
Amortization in 2015
Indicate the pension amounts reported in the financial statementas of December 31, 2014.
Gottschalk Company Income Statement (Partial) For the year endedDcember 31, 2014
| $ |
Gottschalk Company Comprehensive Income Statement December 31,2014
Gottschalk company Balance Sheer (Partial) December 31, 2014
