Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 19, Problem 6P
To determine
Prepare a schedule to compute the net gain or loss included in the pension expense of Company K for 2019, 2020 and 2021, and indicate whether the gain or loss is added to or subtracted from the pension expense.
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Hollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2020.
Plan assets
$200,000
Expected postretirement benefit obligation
820,000
Accumulated postretirement benefit obligation
200,000
No prior service costs or OCI balances exist.
As a result of the plan's operation during 2020, the following additional data are provided by the actuary.
Service cost is $70,000
Discount rate is 10%
Contributions to plan are $65,000
Expected return on plan assets is $10,000
Actual return on plan assets is $15,000
Benefits paid to employees are $44,000
Average remaining service to full eligibility: 20 years
Instructions
Using the preceding data, compute the net periodic postretirement benefit cost for 2020 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts.…
Sandhill Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for
the years 2025 and 2026.
Projected benefit obligation, January 1
Plan assets (fair value and market-related value), January 1
Pension asset/liability, January 1
Prior service cost, January 1
Service cost
Settlement rate
Expected rate of return
Actual return on plan assets
Amortization of prior service cost
Annual contributions
Benefits paid retirees
Increase in projected benefit obligation
due to changes in actuarial assumptions
Accumulated benefit obligation at December 31
Average service life of all employees
Vested benefit obligation at Decem -31
(a1)
2025
Amortization of the loss $
$596,000
411,600
184,400 Cr.
161,400
40,300
10%
10%
35,800
69,500
97,300
31,200
87,100
720,200
Calculate the amortization of the loss (2026) using the corridor approach.
2026
$58,800
10%
10%
61,100
50,500
80,500
53,900
0
792,000
20 years
463,600
On December 31, 2020, an entity paid P200,000 contribution to a defined
contribution plan. Of this amount, P150,000 is in part exchange for services
performed by the employees in December 2019, and the balance of P50,000 is in
respect of services to be performed in 2020.The contribution to the defined
contribution plan is recorded on December 31, 2019 with a:
a. Some other answer.
b. Debit to :Employee benefit expense for P150,000
c. Debit to Prepaid benefit expense P50,000
d. Credit to Cash for P100,000
Chapter 19 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 19 - Prob. 1GICh. 19 - Prob. 2GICh. 19 - Prob. 3GICh. 19 - Prob. 4GICh. 19 - Prob. 5GICh. 19 - Prob. 6GICh. 19 - Prob. 7GICh. 19 - Prob. 8GICh. 19 - Prob. 9GICh. 19 - Prob. 10GI
Ch. 19 - Prob. 11GICh. 19 - Prob. 12GICh. 19 - Prob. 13GICh. 19 - Prob. 14GICh. 19 - Prob. 15GICh. 19 - Prob. 16GICh. 19 - Prob. 17GICh. 19 - Prob. 18GICh. 19 - Prob. 19GICh. 19 - Prob. 20GICh. 19 - Prob. 21GICh. 19 - Prob. 22GICh. 19 - Prob. 23GICh. 19 - The actuarial present value of all the benefits...Ch. 19 - Prob. 2MCCh. 19 - Prob. 3MCCh. 19 - Prob. 4MCCh. 19 - Prob. 5MCCh. 19 - Prob. 6MCCh. 19 - Which of the following is not a component of...Ch. 19 - Prob. 8MCCh. 19 - Prob. 9MCCh. 19 - Prob. 10MCCh. 19 - Prob. 1RECh. 19 - Prob. 2RECh. 19 - Pinecone Company has plan assets of 500,000 at the...Ch. 19 - Prob. 4RECh. 19 - Prob. 5RECh. 19 - Prob. 6RECh. 19 - Prob. 7RECh. 19 - Prob. 8RECh. 19 - Given the following information for Tyler Companys...Ch. 19 - At the beginning of Year 1, Cactus Company has...Ch. 19 - Prob. 11RECh. 19 - Prob. 1ECh. 19 - Prob. 2ECh. 19 - Prob. 3ECh. 19 - Prob. 4ECh. 19 - Prob. 5ECh. 19 - Prob. 6ECh. 19 - Prob. 7ECh. 19 - Prob. 8ECh. 19 - Prob. 9ECh. 19 - Prob. 10ECh. 19 - Prob. 11ECh. 19 - Prob. 12ECh. 19 - Prob. 13ECh. 19 - Refer to the information provided in E19-13....Ch. 19 - Prob. 15ECh. 19 - Prob. 16ECh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - Prob. 12PCh. 19 - Prob. 1CCh. 19 - Prob. 2CCh. 19 - Prob. 3CCh. 19 - Prob. 4CCh. 19 - Prob. 5CCh. 19 - Prob. 6CCh. 19 - Prob. 7CCh. 19 - Prob. 9C
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- Sandhill Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2025, the following balances relate to this plan. Plan assets Projected benefit obligation Pension asset/lability Accumulated OCI (PSC) (a) As a result of the operation of the plan during 2025, the following additional data are provided by the actuary. Service cost Settlement rate, 9% Actual return on plan assets Amortization of prior service cost Expected returson plan assets Unexpected loss from change in projected benefit obligation due to change in actuarial predictions Contributions Benentspaid retirees items Balance, Jan 1, 2025 Service cost $496,400 610,800 interest cost 114400 Actual return 98,000 Dr. Unexpected gain Using the data above, compute pension expense for Sandhill. for the year 2025 by preparing a pension worksheet. (Enter all amounts as positive.) $90.900 54,700 18.300 51.600 76.600 103.700 85,200 Annual Pension Expense C Cath SUPPORTarrow_forwardHollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2020. Plan assets $200,000 Expected postretirement benefit obligation 820,000 Accumulated postretirement benefit obligation 200,000 No prior service costs or OCI balances exist As a result of the plan's operation during 2020, the following additional data are provided by the actuary. Service cost is $70,000 Discount rate is 10% Contributions to plan are $65,000 Expected return on plan assets is $10,000 Actual return on plan assets is $15,000 Benefits paid to employees are $44,000 Average remaining service to full eligibility: 20 years Instructions: a. Using the preceding data, compute the net periodic postretirement benefit cost for 2020 by preparing a worksheet that shows the journal entry for postretirement expense and the year-end balances in the related postretirement benefit memo accounts.…arrow_forwardThe following data pertains to Integrity Company that adopts a defined benefit plan for its employees: Defined benefit obligation, January 1, 2021 - P6,250,000 Plan assets at fair value, January 1, 2021 - P5,800,000 Based on the reference to market yields at the end of the year, the discount rate is determined at 10%. During the year 2021, current years’ service cost totaled P940,000 while contributions made to the fund amounted to P1,245,000 and benefits paid to retired employees totaled P1,450,000. Because the company is not making impressive income in the past years, benefits were reduced as a result of an amendment in the plan. The past service cost, which is a negative figure, amounted to P220,000. After remeasurement at the end of the year, an actuarial gain on the defined benefit obligation was computed at P102,000. Actual return on plan assets amounted to P600,000. How much is the retirement benefit cost taken to profit or loss and to other comprehensive income, respectively?…arrow_forward
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