Question
The City of Townsville recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end. The City offers a pension
The City of Townsville recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end. The City offers a pension benefit to its employees who meet certain age and years of employment criteria. The City participates in the State Pension Plan. The Citys actuarially determined contribution requirement to the State Pension Plan for the fiscal year ended 6/30/21 is $4 million. Due to cash inflow shortages the City, which budgeted $4 million for pension payments, paid only $3 million in the fiscal year ended 6/30/21. The City paid the remaining amount on September 30, 2021. Assuming the City maintains its books and records in a manner that facilitates the preparation of its fund financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability?
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