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 $400,000 for the quarter ended December 31.

	Required:
A.	Journalize the entries to record the accrued pension liability on December 31 and the payment to the funding agent on January 15. Refer to the Chart of Accounts for exact wording of account titles.
B.	How does a defined contribution plan differ from a defined benefit plan?

A. Journalize the entry to record the accrued pension liability on December 31. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

A. Journalize the entry to record the payment to the funding agent on January 15. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2

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 the .

In a defined benefit plan, the employees pension depends on , and the employer obligated to pay for the employees future pension benefits.