Question
Item17 14points Time Remaining 1 hour 1 minute 11 seconds 01:01:11 Item 17 Time Remaining 1 hour 1 minute 11 seconds 01:01:11 Michigan Consulting Company
Item17
14points
Time Remaining 1 hour 1 minute 11 seconds
01:01:11
Item 17
Time Remaining 1 hour 1 minute 11 seconds
01:01:11
Michigan Consulting Company has a defined benefit pension plan. The following pension-related data were available for the current calendar year:
PBO: | ||||
Balance, Jan. 1 | $ | 235,000 | ||
Service cost | 36,000 | |||
Interest cost (5% discount rate) | 11,750 | |||
Gain from changes in actuarial assumptions in 2021 | (4,500 | ) | ||
Benefits paid to retirees | (15,000 | ) | ||
Balance, Dec. 31 | $ | 263,250 | ||
Plan assets: | ||||
Balance, Jan.1 | $ | 245,000 | ||
Actual return (expected return was $22,000) | 20,000 | |||
Contributions | 30,000 | |||
Benefits paid | (15,000 | ) | ||
Balance, Dec. 31 | $ | 280,000 | ||
ABO, Dec. 31 | $ | 239,500 | ||
January 1, 2021, balances: | ||||
Prior service costAOCI (amortization $5,075/yr.) | 5,075 | |||
Net gainAOCI (amortization, if any, over 15 years) | 50,750 | |||
There were no other relevant data. Required: 1. Calculate the 2021 pension expense. 2. Prepare the 2021 journal entries to record pension expense and funding. (Show separate entries to record Pension expense and contributions to the plan fund) 3. Prepare any journal entries to record any 2021 gains or losses. (Prepare separate entries to record gains/loss on PBO and Plan Assets for 2021).
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