Problem 20 8 Sarasota Company sponsors a defined benefit pension plan for its employees The following data relate to the operation of the plan for the years 2017 and 2018 2017 2018 Projected benefit obligation, January 1 $603,800 Plan assets (fair value and market related value), January 1 412,500 Pension asset liability, January 1 191,300 Cr Prior service cost, January 1 158,900 Service cost 39,800 $58,700 Settlement rate 10 10 Expected rate of return 10 10 Actual return on plan assets 35,900 60,400 Amortization of prior service cost 69,600 50,000 Annual contributions 97,500 80,200 Benefits paid retirees 31,200 54,480 Increase in projected benefit obligation due to changes in actuarial assumptions 87,700 0 Accumulated benefit obligation at December 31 722,900 782,700 Average service life of all employees 20years Vested benefit obligation at December 31 462,800 Prepare a pension worksheet presenting both years 2017 and 2018 (Round answers to 0 decimal places, e g 5,125 Enter all amounts as positive ) SARASOTA COMPANY Pension Worksheet2017 and 2018 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 $ DrCr $ DrCr $ DrCr $ DrCr $ DrCr $ DrCr $ DrCr Service cost DrCr DrCr DrCr DrCr DrCr DrCr DrCr Interest cost DrCr DrCr DrCr DrCr DrCr DrCr DrCr Actual return DrCr DrCr DrCr DrCr DrCr DrCr DrCr Unexpected loss DrCr DrCr DrCr DrCr DrCr DrCr DrCr Amortization of PSC DrCr DrCr DrCr DrCr DrCr DrCr DrCr Contributions DrCr DrCr DrCr DrCr DrCr DrCr DrCr Benefits DrCr DrCr DrCr DrCr DrCr DrCr DrCr Increase in PBO DrCr DrCr DrCr DrCr DrCr DrCr DrCr Journal entry for 2017 $ DrCr $ DrCr DrCr DrCr DrCr DrCr DrCr Accumulated OCI, Dec 31, 2016 DrCr DrCr DrCr DrCr DrCr Balance, Dec 31, 2017 DrCr DrCr DrCr DrCr DrCr Service cost DrCr DrCr DrCr DrCr DrCr DrCr DrCr Interest cost DrCr DrCr DrCr DrCr DrCr DrCr DrCr Actual return DrCr DrCr DrCr DrCr DrCr DrCr DrCr Unexpected gain DrCr DrCr DrCr DrCr DrCr DrCr DrCr Amortization of PSC DrCr DrCr DrCr DrCr DrCr DrCr DrCr Amortization of loss DrCr DrCr DrCr DrCr DrCr DrCr DrCr Contributions DrCr DrCr DrCr DrCr DrCr DrCr DrCr Benefits DrCr DrCr DrCr DrCr DrCr DrCr DrCr Journal entry for 2018 $ DrCr $ DrCr DrCr DrCr DrCr DrCr DrCr Accumulated OCI, Dec 31, 2017 DrCr DrCr DrCr DrCr DrCr Balance, Dec 31, 2018 $ DrCr $ DrCr $ DrCr $ DrCr $ DrCr Accompanyingcomputations and amortization of the loss (2018) using the corridor approach Amortization of the loss $ Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year (Round answers to 0 decimal places, e g 5,125 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 ) Date Account Titles and Explanation Debit Credit Dec 31, 2017 Dec 31, 2018 For 2018, indicate the pension amounts reported in the financial statements (Round answers to 0 decimal places, e g 5,125 ) SarasotaCompany Income Statement (Partial) December 31, 2018For the Year Ended December 31, 2018For the Quarter Ended December 31, 2018 DividendsExpensesNet Income (Loss)Retained Earnings, January 1, 2018Retained Earnings, December 31, 2018RevenuesTotal ExpensesTotal Revenues Amortization of LossAsset Gain (Loss)Comprehensive Income (Loss)Liability Gain (Loss)Pension ExpensePrior Service Cost AmortizationOther Comprehensive Income (Loss)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 27, 2024

Problem 20-8 Sarasota Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the

Problem 20-8 Sarasota Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018.

2017	2018
Projected benefit obligation, January 1	$603,800
Plan assets (fair value and market-related value), January 1	412,500
Pension asset/liability, January 1	191,300	Cr.
Prior service cost, January 1	158,900
Service cost	39,800	$58,700
Settlement rate	10	%	10	%
Expected rate of return	10	%	10	%
Actual return on plan assets	35,900	60,400
Amortization of prior service cost	69,600	50,000
Annual contributions	97,500	80,200
Benefits paid retirees	31,200	54,480
Increase in projected benefit obligation due to changes in actuarial assumptions	87,700	0
Accumulated benefit obligation at December 31	722,900	782,700
Average service life of all employees	20years
Vested benefit obligation at December 31	462,800

Prepare a pension worksheet presenting both years 2017 and 2018.(Round answers to 0 decimal places, e.g. 5,125. Enter all amounts as positive.)

SARASOTA COMPANY Pension Worksheet2017 and 2018

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

DrCr.

Service cost

DrCr.

Interest cost

DrCr.

Actual return

DrCr.

Unexpected loss

DrCr.

Amortization of PSC

DrCr.

Contributions

DrCr.

Benefits

DrCr.

Increase in PBO

DrCr.

Journal entry for 2017

DrCr.

Accumulated OCI, Dec. 31, 2016

DrCr.

Balance, Dec. 31, 2017

DrCr.

Service cost

DrCr.

Interest cost

DrCr.

Actual return

DrCr.

Unexpected gain

DrCr.

Amortization of PSC

DrCr.

Amortization of loss

DrCr.

Contributions

DrCr.

Benefits

DrCr.

Journal entry for 2018

DrCr.

Accumulated OCI, Dec. 31, 2017

DrCr.

Balance, Dec. 31, 2018

DrCr.

Accompanyingcomputations and amortization of the loss (2018) using the corridor approach.

Amortization of the loss

Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.(Round answers to 0 decimal places, e.g. 5,125. 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.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2017




Dec. 31, 2018

For 2018, indicate the pension amounts reported in the financial statements.(Round answers to 0 decimal places, e.g. 5,125.)

SarasotaCompany Income Statement (Partial) December 31, 2018For the Year Ended December 31, 2018For the Quarter Ended December 31, 2018
DividendsExpensesNet Income / (Loss)Retained Earnings, January 1, 2018Retained Earnings, December 31, 2018RevenuesTotal ExpensesTotal Revenues
Amortization of LossAsset Gain (Loss)Comprehensive Income (Loss)Liability Gain (Loss)Pension ExpensePrior Service Cost AmortizationOther Comprehensive Income (Loss)