Question
The following facts apply to the pension plan of Pharoah Inc. for the year 2020. Pharoah applies ASPE. Plan assets, January 1, 2020 $510,000 Defined
The following facts apply to the pension plan of Pharoah Inc. for the year 2020. Pharoah applies ASPE.
Plan assets, January 1, 2020 | $510,000 | ||
Defined benefit obligation, funding basis, January 1, 2020 | 409,000 | ||
Defined benefit obligation, accounting basis, January 1, 2020 | 510,000 | ||
Discount/interest rate | 8.50% | ||
Annual pension service cost | 42,100 | ||
Contributions | 30,500 | ||
Actual return on plan assets | 51,950 | ||
Benefits paid to retirees | 34,000 |
(a)
Calculate pension expense for the year 2020, and provide the entries to recognize the expense and contributions for the year assuming that Pharoah has chosen the funding measure of its defined benefit obligation as its accounting policy choice. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Pension expense | $enter Pension expense in dollars |
Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
December 31, 2020 | enter an account title to record pension expense ContributionsNet Defined Benefit Liability/AssetPension Contributions PayablePension ExpenseCash | enter a debit amount | enter a credit amount |
enter an account title to record pension expense CashPension ExpenseNet Defined Benefit Liability/AssetContributionsPension Contributions Payable | enter a debit amount | enter a credit amount | |
(To record pension expense.) | |||
December 31, 2020 | enter an account title to record contributions to the pension fund Pension Contributions PayableContributionsNet Defined Benefit Liability/AssetPension ExpenseCash | enter a debit amount | enter a credit amount |
enter an account title to record contributions to the pension fund Net Defined Benefit Liability/AssetPension Contributions PayableCashPension ExpenseContributions | enter a debit amount | enter a credit amount | |
(To record contributions to the pension fund.) |
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