Question
The following data relate to the operation of Nash Co.s pension plan in 2021. Service cost $64,310 Actual return on plan assets 34,880 Amortization of
The following data relate to the operation of Nash Co.s pension plan in 2021.
| Service cost | $64,310 | |
| Actual return on plan assets | 34,880 | |
| Amortization of prior service cost | 30,520 | |
| Annual contributions | 55,590 | |
| Benefits paid retirees | 29,430 | |
| Average service life of all employees | 25 years |
The pension worksheet for 2020 is presented below.
| NASH COMPANY Worksheet2020 | |||||||||||||||||||||||
| 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, 2020 | $130,800 | Cr. | $354,250 | Cr. | $223,450 | Dr. | |||||||||||||||||
| Service cost | $21,800 | Dr. | 21,800 | Cr. | |||||||||||||||||||
| Interest cost | 28,340 | Dr. | 28,340 | Cr. | |||||||||||||||||||
| Actual return | 19,620 | Cr. | 19,620 | Dr. | |||||||||||||||||||
| Unexpected loss | 2,725 | Cr. | $2,725 | Dr. | |||||||||||||||||||
| Amortization of PSC | 38,150 | Dr. | $38,150 | Cr. | |||||||||||||||||||
| Contributions | $44,690 | Cr. | 44,690 | Dr. | |||||||||||||||||||
| Benefits | 16,350 | Dr. | 16,350 | Cr. | |||||||||||||||||||
| Increase in PBO | 47,415 | Dr. | 47,415 | Cr. | |||||||||||||||||||
| Journal entry for 2020 | $65,945 | Dr. | $44,690 | Cr. | 38,150 | Cr. | 50,140 | Dr. | 33,245 | Cr. | |||||||||||||
| Accumulated OCI, Dec. 31, 2019 | 87,200 | Dr. | 0 | ||||||||||||||||||||
| Balance, Dec. 31, 2020 | $49,050 | Dr. | $50,140 | Dr. | $164,045 | Cr. | $435,455 | Cr. | $271,410 | Dr. | |||||||||||||
For 2021, Nash will use the same assumptions as 2020 for the expected rate of returns on plan assets. The settlement rate for 2021 is 10%.
(a)
Prepare a pension worksheet for 2021. (Round answers to 0 decimal places, e.g. 2,500. Enter all amounts as positive.)
| NASH COMPANY Pension Worksheet2021 | |||||||||||||||||||||||
| General Journal Entries | Memo Record | ||||||||||||||||||||||
| Items | Annual Pension Expense | Cash | OCIPrior Service Cost | OCI Gain/ Loss | Pension Asset/ Liability | Projected Benefit Obligation | Plan Assets | ||||||||||||||||
Calculate the amortization of the loss, if any, in 2021 using the corridor approach. (Round answers to 0 decimal places, e.g. 2,500.)
| Amortization of the loss |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Rigos Primer Series CPA Exam Review Financial Accounting Questions And Answers
Authors: Mr. James J. Rigos
2020 Edition
979-8642293720
