Question

Presented below is information related to Stage Department Stores, Inc. pension plan for 2018. Service cost...

Presented below is information related to Stage Department Stores, Inc. pension plan for 2018.

Service cost $1,100,000
Funding contribution for 2018 1,060,000
Settlement rate used in actuarial computation 10%
Expected return on plan assets 9%
Amortization of PSC (due to benefit increase) 180,000
Amortization of unrecognized net gains 96,000
Projected benefit obligation (at beginning of period) 1,080,000
Fair value of plan assts (at beginning of period) 720,000

Instructions

1.Compute the amount of pension expense to be reported for 2018. (Show computations.)

2.Prepare the journal entry to record pension expense and the employer’s contribution for 2018.

Homework Answers

Answer #1

(a)

Service cost $1,100,000
Interest on projected benefit obligation ($1,080,000 × 10%) $108,000
Expected return on plan assets ($720,000 × 9%) ($64,800)
Amortization of PSC $180,000
Amortization of net gains ($96,000)
Pension expense—2018 $1,227,200

2.

General Journal Debit Credit
Pension Expense $1,227,200
Other Comprehensive Income (G/L) $96,000
Cash $1,060,000
Other Comprehensive Income (PSC) $180,000
Pension Asset / Liability $83,200
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Presented below is information on the Jones Department Stores, Inc. pension plan for 2021:                  Service...
Presented below is information on the Jones Department Stores, Inc. pension plan for 2021:                  Service cost                                                                                                       470,000          Funding contribution for 2021                                                                          380,000          Settlement rate used in actuarial computation                                                       10%          Return on plan assets                                                                                          22,400          Amortization of PSC (due to benefit increase)                                                  90,000          Projected benefit obligation (at beginning of period)                                      450,000          Fair value of plan assets (at beginning of period)                                            360,000       (US GAAP) (a)    Compute the amount of pension expense to be reported for...
Presented below is information related to the pension plan of Adams Inc. for the year 2018....
Presented below is information related to the pension plan of Adams Inc. for the year 2018. 1. The service cost related to pension expense is $240,000 using the projected benefits approach. 2. The projected benefit obligation at the beginning of the year is $300,000. The expected return on plan assets is 9% and the settlement rate is 10%. The actual return on plan assets was 8.5%. 3. The accumulated OCI--prior service cost at the beginning of the year is $140,000....
Presented below is information related to Marley Inc. pension data for 2019. Service cost $700,000 Amortization...
Presented below is information related to Marley Inc. pension data for 2019. Service cost $700,000 Amortization of unrecognized net gain 80,000 Amortization of unrecognized prior service cost 130,000 Actual return on plan assets 65,000 Projected benefit obligation at January 1,2019 900,000 Plan assets at January 1,2019 780,000 Contribution (funding) 400,000 On 1/1/2019, PSC was granted having a present value of 100,000 Benefits paid to retirees 200,000 Settlement rate 9% Expected rate of return 7% What amount would be reported as...
Here is information for 2018 related to the pension plan for Cherry's Department Stores. Amortization of...
Here is information for 2018 related to the pension plan for Cherry's Department Stores. Amortization of net gain $ 30,000 Amortization of prior service cost 10,000 Employer’s funding contribution for 2020 90,000 Fair value of plan assets (at beginning of 2020) 360,000 Interest cost on the PBO 48,000 Projected benefit obligation (at beginning of 2020) 480,000 Retirement benefits paid by the pension plan in 2020 65,000 Return on plan assets (both the actual return and the expected return) 32,500 Service...
Sandhill, Inc. received the following information from its pension plan trustee concerning the operation of the...
Sandhill, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2019: January 1, 2019 December 31, 2019 Projected benefit obligation $2,490,000 $2,840,000 Fair value of plan assets 1,240,000 1,590,000 Accumulated benefit obligation 1,929,000 2,619,000 Accumulated OCI―(PSC) 539,000 299,500 The service cost component for 2019 is $139,500 and the amortization of prior service cost is $239,500. The company's actual funding of the plan in 2019...
Kessler, Inc. received the following information from its pension plan trustee concerning the operation of the...
Kessler, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2021: January 1, 2021 December 31, 2021 Projected benefit obligation $2,500,000 $2,850,000 Fair value of plan assets 1,250,000 1,600,000 Accumulated benefit obligation 1,930,000 2,620,000 Accumulated OCI – (PSC) 540,000 300,000 The service cost component for 2021 is $180,000 and the amortization of prior service cost is $240,000. The company's actual funding of the plan...
ABC Corp. received the following information from its pension plan trustee concerning the operation of the...
ABC Corp. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2018: January 1, 2018 December 31, 2018 Projected benefit obligation (PBO) $2,200,000 Market-related asset value 1,700,000 Accumulated Other Comprehensive Income (PSC) 890,000 Unrecognized net (gains) and losses   -0- 400,000 Service Cost 125,000 Amortization of prior service cost 240,000 Contribution 610,000 Benefits 200,000 Actual Return on plan asset 100,000 Settlement Rate & Expected rate of...
Swifty Company sponsors a defined benefit pension plan. The following information related to the pension plan...
Swifty Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2017 and 2018. 2017 2018 Plan assets (fair value), December 31 $810,840 $984,840 Projected benefit obligation, January 1 812,000 928,000 Pension asset/liability, January 1 162,400 Cr. ? Prior service cost, January 1 290,000 278,400 Service cost 69,600 104,400 Actual and expected return on plan assets 27,840 34,800 Amortization of prior service cost 11,600 13,920 Contributions (funding) 133,400 139,200 Accumulated benefit obligation,...
Marin Company sponsors a defined benefit pension plan. The following information related to the pension plan...
Marin Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2020 and 2021. 2020 2021 Plan assets (fair value), December 31 $754,920 $916,920 Projected benefit obligation, January 1 756,000 864,000 Pension asset/liability, January 1 151,200 Cr. ? Prior service cost, January 1 270,000 259,200 Service cost 64,800 97,200 Actual and expected return on plan assets 25,920 32,400 Amortization of prior service cost 10,800 12,960 Contributions (funding) 124,200 129,600 Accumulated benefit obligation,...
Bonita Company sponsors a defined benefit pension plan for its employees. The following data relate to...
Bonita Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid. 1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $56,300. 2. The company’s funding policy requires a contribution to the pension trustee amounting to $136,404 for 2020. 3. As of January 1, 2020, the company had a projected benefit obligation...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT