Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fukuyama Inc. has a defined benefit pension plan. Below is information pertaining to the plan for fiscal year 2020. 1. Service cost related to pension

Fukuyama Inc. has a defined benefit pension plan. Below is information pertaining to the plan for fiscal year 2020. 1. Service cost related to pension expense is $140,000.

2. The projected benefit obligation at the beginning of the year is $305,000.

3. The fair value of plan assets at the beginning of the year equals $280,000.

4. The actual return on plan assets equals $30,000.

5. The expected return on plan assets is 9%.

6. The settlement rate is 10%.

7. The accumulated OCI--prior service cost at the beginning of the year is $140,000. The company has a workforce of 200 employees, all of whom are expected to receive benefits under the plan. Their total number of remaining service-years is 1,000 and the service-years attributable to 2020 is 200. The company uses the years-of-service method to amortize these costs.

8. At the beginning of the year, the company has an Accumulated OCI (loss) $70,000. Any amortization is recognized on a straight-line basis over the average remaining service-life of the employees.

9. The contribution made to the pension fund in 2020 was $131,000.

Instructions (a) Determine the pension expense to be reported on the income statement for 2020. (Round all computations to nearest dollar.)

(b) Prepare the journal entry to record pension expense for 2020. I highly recommend solving this problem in a pension worksheet, which you can copy from the chapter 20 course notes.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Financial Institutions Management A Risk Management Approach

Authors: Anthony Saunders Professor, Marcia Millon Cornett, Otgo Erhemjamts

10th International Edition

1260571475, 9781260571479

More Books

Students also viewed these Finance questions

Question

differentiate the function ( x + 1 ) / ( x ^ 3 + x - 6 )

Answered: 1 week ago