Required: 1. What is the pension expense at the end of 2021? 2. What is the projected benefit obligation at the end of 2021? 3. What is the plan assets balance at the end of 2021? onsinn asset or net pension liability at the end of

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020.
Plan assets
$550,e00
420,000
Projected benefit obligation
U.S.M's actuary determined that 2021 service cost is $75,00O. Both the expected and actual rate of return on plan assets are 8%. The
interest (discount) rate is 5%. U.S.M. contributed $135,000 to the pension fund at the end of 2021, and retirees were paid $59,000 from
plan assets. (Enter your answers in thousands (i.e., 10,000 should be entered as 10).)
Required:
1. What is the pension expense at the end of 2021?
2. What is the projected benefit obligation at the end of 2021?
3. What is the plan assets balance at the end of 2021?
4. What is the net pension asset or net pension liability at the end of 2021?
5. Prepare journal entries to record the (a) pension expense, (b) funding of plan assets, and (c) retiree benefit payments.
Complete this question by entering your answers in the tabs below.
Transcribed Image Text:U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2020. Plan assets $550,e00 420,000 Projected benefit obligation U.S.M's actuary determined that 2021 service cost is $75,00O. Both the expected and actual rate of return on plan assets are 8%. The interest (discount) rate is 5%. U.S.M. contributed $135,000 to the pension fund at the end of 2021, and retirees were paid $59,000 from plan assets. (Enter your answers in thousands (i.e., 10,000 should be entered as 10).) Required: 1. What is the pension expense at the end of 2021? 2. What is the projected benefit obligation at the end of 2021? 3. What is the plan assets balance at the end of 2021? 4. What is the net pension asset or net pension liability at the end of 2021? 5. Prepare journal entries to record the (a) pension expense, (b) funding of plan assets, and (c) retiree benefit payments. Complete this question by entering your answers in the tabs below.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Employee Compensations and Benefits
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education