Question 5

Recording Pension Expense, Gains/ Losses, Funding, Benefit Payments and Preparing Worksheet

Amex Company started a noncontributory defined benefit pension plan on January 1, 2019. The records of Amex Company indicate the following for the year 2020.

Account Balances	Jan. 1, 2020
Projected Benefit Obligation	$42,000 Cr.
Plan Assets	38,500 Dr.
Accumulated OCIPension Gain/Loss	2,100 Cr.

Activity	2020
Service cost	$14,000
Interest cost (interest rate, 10%)	4,200
Gain in PBO due to change in actuarial assumption	2,800
Pension benefits paid	700
Actual earnings on plan assets (same as expected return)	3,500
Plan funding payment (contributions)	21,000

• Financial Statement Amounts and Entries
• Pension Worksheet

d. Create a worksheet to summarize the pension data at the end of 2020.

	Reported Net in Financial Statements		Reported on Balance Sheet				Reported in Comprehensive Income
				Accumulated OCI				OCI
	Plan Assets	PBO	Net Pension Asset/Liability	Prior Service Cost	Pension Gain/Loss	Cash Outflow	Pension Expense	Prior Service Cost	Pension Gain/Loss
Balance, January 1, 2020	Answer	Answer	Answer	Answer	Answer
Service cost	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Interest cost	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Expected return	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Defer actuarial gain on PBO	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Amortization of pension gain/loss	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Contributions to fund	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Benefits payments	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Balance, December 31, 2020	Answer	Answer	Answer	Answer	Answer		Answer	Answer	Answer