Yuri Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Funds, by the fifteenth of the month following the end of each quarter. Assume that the pension cost is $365,000 for the quarter ended December 31.

	Required:
A.	Journalize the entries to record the accrued pension liability on December 31, 2015 (on page 11 of the journal) and the payment to the funding agent on January 15, 2016 (on page 12 of the journal). Refer to the Chart of Accounts for exact wording of account titles. Be sure to include the year when entering the date in the journal.
B.	How does a defined contribution plan differ from a defined benefit plan?

Chart of Accounts

CHART OF ACCOUNTS

Yuri Co.

General Ledger

	ASSETS
110	Cash
111	Accounts Receivable
112	Interest Receivable
113	Notes Receivable
115	Merchandise Inventory
116	Supplies
118	Prepaid Insurance
120	Land
123	Building
124	Accumulated Depreciation-Building
125	Office Equipment
126	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
213	Interest Payable
214	Notes Payable
215	Salaries Payable
216	Social Security Tax Payable
217	Medicare Tax Payable
218	Employees Federal Income Tax Payable
219	Employees State Income Tax Payable
221	Retirement Savings Deductions Payable
224	Federal Unemployment Tax Payable
225	State Unemployment Tax Payable
226	Vacation Pay Payable
227	Unfunded Pension Liability
228	Product Warranty Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
524	Depreciation Expense-Building
525	Delivery Expense
526	Repairs Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Supplies Expense
535	Payroll Tax Expense
536	Vacation Pay Expense
537	Pension Expense
538	Cash Short and Over
539	Product Warranty Expense
540	Miscellaneous Expense
710	Interest Expense

Journal

A. Journalize the entries to record the accrued pension liability on December 31, 2015 (on page 11 of the journal) and the payment to the funding agent on January 15, 2016 (on page 12 of the journal). Refer to the Chart of Accounts for exact wording of account titles. Be sure to include the year when entering the date in the journal.

PAGE 11PAGE 12

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

Final question

B. How does a defined contribution plan differ from a defined benefit plan?

In a defined contribution plan, the company invests contributions on behalf of the employee . The employees pension depends on In a defined benefit plan, the employees pension depends on , and the employer obligated to pay for the employees future pension benefits.