Question
The following balances relate to the defined benefit pension plan of Spencer Industries. Unrecognized gain or loss, 1/1/2015 .. -0- Projected benefit obligation, 1/1/2015 $60,000
The following balances relate to the defined benefit pension plan of Spencer Industries.
Unrecognized gain or loss, 1/1/2015 .. | -0- |
Projected benefit obligation, 1/1/2015 | $60,000 |
Discount rate ....................... | 10% |
Fair value of plan assets, 1/1/2015.. | $24,000 |
Initial prior service cost value from amendment on 1/1/2007 ............... |
$40,000 |
Unrecognized prior service cost, 1/1/2015 ........................... |
$ 8,000 |
Average remaining service life of employees covered under initial prior service cost grant .................. |
10 years |
Actuarial loss, 1/1/2015 ............ | $12,000 |
Expected rate of return on plan assets | 12% |
Average remaining service life used to amortize unrecognized gain or loss .. |
12 years |
Service cost, 2015 .................. | $12,000 |
Service cost, 2016 .................. | $14,000 |
Contribution to plan assets, end of 2015 ........ |
$16,000 |
Contribution to plan assets, end of 2016 ........ |
$20,000 |
Actual return on plan assets in 2015 | $ 1,800 |
Actual return on plan assets in 2016 | $ 2,400 |
No benefits were paid in either 2015 or 2016.
Required:
Prepare a pension worksheet for 2015 and 2016.
Prepare the required journal entries for 2015 and 2016.
Prepare the funded status reconciliation disclosure.
4. Compute pension expense for 2015 and 2016, assuming minimum amortization is taken.The following balances relate to the defined benefit pension plan of Spencer Industries.
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