Exercise 20-10

Waterway Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan.

Plan assets $463,400 Projected benefit obligation 598,900 Pension asset/liability 135,500 Accumulated OCI (PSC) 103,300 Dr.

As a result of the operation of the plan during 2017, the following additional data are provided by the actuary.

Service cost $94,300 Settlement rate, 8% Actual return on plan assets 52,200 Amortization of prior service cost 18,400 Expected return on plan assets 49,100 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 79,400 Contributions 99,100 Benefits paid retirees 85,400

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Using the data above, compute pension expense for Waterway Corp. for the year 2017 by preparing a pension worksheet. (Enter all amounts as positive.)

WATERWAY CORP. Pension Worksheet General Journal Entries Memo Record Items Annual Pension Expense Cash OCIPrior Service Cost OCI Gain/ Loss Pension Asset/ Liability Projected Benefit Obligation Plan Assets Balance, Jan. 1, 2017 $ Dr. Cr. $ Dr. Cr. $ 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 gain 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. Liability increase 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 2017 $ Dr. Cr. $ Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Accumulated OCI, Dec. 31, 2016 Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Balance, December 31, 2017 $ Dr. Cr. $ Dr. Cr. $ Dr. Cr. $ Dr. Cr. $ Dr. Cr.

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Prepare the journal entry for pension expense for 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation Debit Credit

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