Question

Exercise 20-04

The following facts apply to the pension plan of Vaughn Inc. for the year 2020.

Plan assets, January 1, 2020		$525,500
Projected benefit obligation, January 1, 2020		525,500
Settlement rate		8	%
Service cost		36,800
Contributions (funding)		23,800
Actual and expected return on plan assets		49,800
Benefits paid to retirees		30,300

Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts. (Enter all amounts as positive.)

VAUGHN INC. Pension Worksheet—2020
		General Journal Entries									Memo Record
Items		Annual Pension Expense			Cash			Pension Asset/ Liability			Projected Benefit Obligation			Plan Assets
Balance, January 1, 2020		$enter a net debit or credit balance	select between debit and credit Dr.Cr.		$enter a net debit or credit balance	select between debit and credit Dr.Cr.		$enter a net debit or credit balance	select between debit and credit Dr.Cr.		$enter a net debit or credit balance	select between debit and credit Dr.Cr.		$enter a net debit or credit balance	select between debit and credit Dr.Cr.
Service cost		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.
Interest cost		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.
Actual return		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.
Contributions		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.
Benefits		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.		enter a dollar amount	select between debit and credit Dr.Cr.
Journal entry, December 31		$enter a net debit or credit amount	select between debit and credit Dr.Cr.		$enter a net debit or credit amount	select between debit and credit Dr.Cr.		enter a net debit or credit amount	select between debit and credit Dr.Cr.		enter a net debit or credit amount	select between debit and credit Dr.Cr.		enter a net debit or credit amount	select between debit and credit Dr.Cr.
Balance, December 31, 2020								$enter a net debit or credit balance	select between debit and credit Dr.Cr.		$enter a net debit or credit balance	select between debit and credit Dr.Cr.		$enter a net debit or credit balance	select between debit and credit Dr.Cr.

Do not copy from same question on chegg, those have the numbers in the wrong spot.

Answer 1

VAUGHN INC. Pension Worksheet—2020
		General Journal Entries									Memo Record
Items		Annual Pension Expense			Cash			Pension Asset/ Liability			Projected Benefit Obligation			Plan Assets
Balance, January 1, 2020											$525500	Cr.		$525500	Dr.
Service cost		36800	Dr.								36800	Cr.
Interest cost		42040	Dr.								42040	Cr.
Actual return		49800	Cr.											49800	Dr.
Contributions					23800	Cr.								23800	Dr.
Benefits											30300	Dr.		30300	Cr.
Journal entry, December 31		29040	Dr.		23800	Cr.		5240	Cr.
Balance, December 31, 2020								5240	Cr.		574040	Cr.		568800	Dr.

.Interest costs= $525500*8%= $42040