![Brief Exercise 20-3
At January 1, 2014, Hennein Company had plan assets of
$290,800 and a projected benefit obligation of the same amount.
During 2014, service cost was $28,930, the settlement rate was
10%, actual and expected return on plan assets were $29,070,
contributions were $24,250, and benefits paid were $21,950.
Prepare a pension worksheet for Hennein Company for 2014.
HENNEIN COMPANY
General Journal Entries
Memo Record
Items
Pension
Expense
Cash
Pension
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
1/1/14
$
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$
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$
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$
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Service cost
[removed]
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- 1. Brief Exercise 20-3 At January 1, 2014, Hennein Company had plan assets of $290,800 and a projected benefit obligation of the same amount. During 2014, service cost was $28,930, the settlement rate was 10%, actual and expected return on plan assets were $29,070, contributions were $24,250, and benefits paid were $21,950. Prepare a pension worksheet for Hennein Company for 2014. HENNEIN COMPANY General Journal Entries Memo Record Items Pension Expense Cash Pension Asset/Liability Projected Benefit Obligation Plan Assets 1/1/14 $ [removed] [removed]
- 6. Ending Balances $ [removed] [removed] $ [removed] [removed] Brief Exercise 20-4 For 2012, Campbell Soup Company had pension expense of $73 million and contributed $71 million to the pension fund. Prepare Campbell Soup Company’s journal entry to record pension expense and funding. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Enter amounts in millions.
- 7. Ex: 10,000,000 is to be imputed as 10, eliminating the 000,000.) Account Titles and Explanation Debit Credit [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] Brief Exercise 20-9 Norton Co. had the following amounts related to its pension plan in 2014. Actuarial liability loss for 2014 $29,530 Unexpected asset gain for 2014 19,830 Accumulated other comprehensive income (G/L) (beginning balance) 7,770 Cr. Determine for 2014: (a) Norton’s other comprehensive income (loss), and (b) comprehensive income. Net income for 2014 is $27,380; no amortization of gain or loss is necessary in 2014.
- 8. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (a) Other comprehensive income (loss) $ [removed] (b) Comprehensive income $ [removed] Exercise 20-1 (Part Level Submission) The following information is available for the pension plan of Radcliffe Company for the year 2014. Actual and expected return on plan assets $ 18,390 Benefits paid to retirees 48,900 Contributions (funding) 93,130 Interest/discount rate 11
- 9. % Prior service cost amortization 8,200 Projected benefit obligation, January 1, 2014 607,100 Service cost 73,410 (a) Compute pension expense for the year 2014. Pension expense for 2014 $ [removed] (b) Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit [removed] [removed] [removed] [removed] [removed]
- 10. [removed] [removed] [removed] [removed] [removed] [removed] [removed] Exercise 20-6 Gingrich Importers provides the following pension plan information. Fair value of pension plan assets, January 1, 2014 $2,434,500 Fair value of pension plan assets, December 31, 2014 2,870,600 Contributions to the plan in 2014 283,100 Benefits paid retirees in 2014 354,900 From the data above, compute the actual return on the plan assets for 2014. Actual return on plan assets for 2014 $ [removed]
- 11. Exercise 20-18 (Part Level Submission) The accounting staff of Usher Inc. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and completing the accounting tasks related to the pension plan for 2014. (a) Determine the missing amounts in the 2014 pension worksheet, indicating whether the amounts are debits or credits. Pension Worksheet—Usher Inc. General Journal Entries Memo Record Annual Pension Expense Cash OCI—Prior Service Cost OCI—Gain/ Loss Pension Asset/ Liability Projected Benefit
- 12. Obligation Plan Assets Balance, Jan. 1, 2014 $1,695 [removed] $4,315 [removed] $2,620 [removed] Service cost $
- 15. [removed] Unexpected gain 231 [removed] $ [removed] [removed] Amortization of PSC [removed] [removed]
- 19. [removed] [removed] [removed] [removed] [removed] [removed] Accumulated OCI, Dec. 31, 2013 1,695 [removed] 0
- 20. Balance, Dec. 31, 2014 $1,610 [removed] $331 [removed] $1,887 [removed] $5,771 [removed]
- 21. $3,884 [removed] (b) Prepare the journal entry to record 2014 pension expense for Usher Inc. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] Problem 20-1 (Part Level Submission)
- 22. On January 1, 2014, Harrington Company has the following defined benefit pension plan balances. Projected benefit obligation $4,510,000 Fair value of plan assets 4,219,800 The interest (settlement) rate applicable to the plan is 10%. On January 1, 2015, the company amends its pension agreement so that prior service costs of $508,200 are created. Other data related to the pension plan are as follows. 2014 2015 Service cost $153,600 $199,100 Prior service cost amortization –0– 98,100 Contributions (funding) to the plan 243,800
- 23. 306,000 Benefits paid 203,400 292,600 Actual return on plan assets 253,188 272,200 Expected rate of return on assets 6 % 8 % (a) Prepare a pension worksheet for the pension plan for 2014 and 2015. HARRINGTON COMPANY Pension Worksheet—2014 and 2015 General Journal Entries Memo Record Items
- 24. Annual Pension Expense Cash OCI—Prior Service Cost OCI—Gain/ Loss Pension Asset/ Liability Projected Benefit Obligation Plan Assets Balance, Jan. 1, 2014 $ [removed] [removed] $ [removed] [removed] $ [removed] [removed]
- 30. [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] Journal entry for 2014 $ [removed] [removed] $
- 34. [removed] [removed] [removed] [removed] [removed] [removed] [removed] Balance, Jan. 1, 2015 [removed] [removed] [removed] [removed] [removed] [removed]
- 42. [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] Journal entry for 2015 $ [removed] [removed] $
- 45. [removed] [removed] $ [removed] [removed] $ [removed] [removed] $ [removed] [removed] $ [removed] [removed] (b) For 2015, prepare the journal entry to record pension-related amounts. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit [removed] [removed]
- 46. [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] [removed] IFRS True False Question 04 Under IFRS companies may recognize actuarial gains and losses in income immediately. a. True b. False Answer: IFRS Multiple Choice Question 06 The International Accounting Standards Board has proposed changes to IFRS pension accounting including all of the following except a.
- 47. a new category of pensions for accounting purpose – “contribution-based promises.” b. requiring recognition of actuarial gains and losses over the expected service lives of employees. c. elimination of smoothing via the corridor approach. d. different presentation of pension costs in the income statement. Answer: IFRS Multiple Choice Question 09 Which of the following is true with regard to pension accounting under U.S. GAAP and IFRS? a. Prior service cost is recognized on the balance sheet under both U.S. GAAP and IFRS. b. Prior service cost is amortized into income over the expected service lives of employees under U.S. GAAP but not under IFRS. c. Accounting for defined-benefit pensions is typically a less important issue in the U. S. than in other parts of the world. d. The accounting for defined-benefit pension plans is the same under U.S. GAAP and IFRS. Answer:
- 48. IFRS Multiple Choice Question 10 Pension liabilities will be impacted in countries where population aging is an issue. Which of the following countries/areas is the most rapidly aging in the developed world? a. Europe b. Japan c. United States d. All three areas are aging at the same approximate rate Answer: IFRS Multiple Choice Question 14 The IASB and the FASB are studying several issues related to accounting for pensions including all of the following except a. requiring companies to report various components of pension expense, such as interest cost, separately in the income statement along with other interest expense. b. eliminating smoothing provisions. c. all of the above issues are under study by the IASB and the FASB. d.
- 49. requiring companies to report actual asset returns and any actuarial gains and losses directly in the income statement. Answer: https://edugen.wiley.com/edugen/lti/main.uni