Question

Vaughn Enterprises provides the following information relative to its defined benefit pension plan.

Balances or Values at December 31, 2020
Projected benefit obligation		$2,726,600
Accumulated benefit obligation		1,982,100
Fair value of plan assets		2,293,300
Accumulated OCI (PSC)		208,700
Accumulated OCI—Net loss (1/1/20 balance, 0)		45,700
Pension liability		433,300
Other pension plan data for 2020:
Service cost		$94,700
Prior service cost amortization		42,100
Actual return on plan assets		129,100
Expected return on plan assets		174,800
Interest on January 1, 2020, projected benefit obligation		252,800
Contributions to plan		93,100
Benefits paid		138,800

(a)

	Your answer is correct.

Prepare the note disclosing the components of pension expense for the year 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

Components of Pension Expense
Actual Return on Plan AssetsBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest CostPrior Service Cost AmortizationService CostPension Expense		$
Actual Return on Plan AssetsBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest CostPrior Service Cost AmortizationService CostPension Expense
Actual Return on Plan AssetsBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest CostPrior Service Cost AmortizationService CostPension Expense
Actual Return on Plan AssetsBenefits PaidContributions to PlanExpected Return on Plan AssetsInterest CostPrior Service Cost AmortizationService CostPension Expense
Actual Return on Plan Assets    Benefits Paid    Contributions to Plan    Expected Return on Plan Assets    Interest Cost    Prior Service Cost Amortization    Service Cost    Pension Expense		$

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Attempts: 1 of 5 used

(b)

Determine the amounts of other comprehensive income and comprehensive income for 2020. Net income for 2020 is $35,000. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Other comprehensive income (loss)		$
Comprehensive income (loss)		$

Answer 1

#ANSWERS:

a)

Particulars	Amount in $
Service Cost	94,700
Interest Expense	252,800
Expected return on plan asset	(174,800)
Prior service cost amortization	42,400
Pension Expense	215,100

b)

Particulars	Amount in $
Prior service cost amortization	42,400
Actuarial loss (174,800 - 129,100)	(45,700)
Other Comprehensive Loss	(3,300)

Particulars	Amount in $
Net income	35,000
Less: Other comprehensive loss	(3,300)
Comprehensive Income	31,700

c)

Particulars	Amount in $
Accumulated OCI (PSC) at December 31 2020	(208,700)
Accumulated OCI - Net loss during 2020	(45,700)
Accumulated OCI (Loss) at Dec 31, 2020	(254,400)