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 6E
1.
To determine
Calculate the amount of projected benefit obligation of Company L for 2019.
2.
To determine
Explain the manner in which a decrease in the discount rate would affect pension expense of Company L.
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On December 31, 2019, Berry Company determined that the 2019 service cost on its defined benefit pension plan was $140,000. At the beginning of 2019, Berry had pension plan assets of $510,000 and a projected benefit obligation of $700,000. Its discount rate (and expected long-term rate of return on plan assets) for 2019 was 10%. There are no other components of Berry's pension expense; the company had an accrued/prepaid pension cost liability at the end of 2018.
Required:
1.
Compute the amount of Berry's pension expense for 2019.
2.
Prepare the journal entry to record Berry's 2019 pension expense if it funds the pension plan in the amount of (a) $159,000 and (b) $140,000.
On December 31, 2019, Palmer Company determined that the 2019 service cost on its defined benefit pension plan was $130,000. At the beginning of 2019, Palmer had pension plan assets of $520,000 and a projected benefit obligation of $700,000. Its discount rate (and expected long-term rate of return on plan assets) for 2019 was 10%. There are no other components of Palmer’s pension expense; the company had an accrued/prepaid pension cost liability at the end of 2018.
Required:
1.
Compute the amount of Palmer’s pension expense for 2019.
2.
Prepare the journal entry to record Palmer’s 2019 pension expense if it funds the pension plan in the amount of (a) $148,000 and (b) $130,000.
Cullumber Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for
2025 and 2026.
Plan assets (fair value), December 31
Projected benefit obligation, January 1
Pension asset/liability, January 1
Prior service cost, January 1
Service cost
Actual and expected return on plan assets
Amortization of prior service cost
Contributions (funding)
Accumulated benefit obligation, December 31
Interest/settlement rate
No benefits were paid in 2025 or 2026.
(a)
Compute pension expense for 2025 and 2026.
Pension expense for 2025
Pension expense for 2026
$
$
2025
$873,750
875,000
175,000 Cr.
312,500
75,000
30,000
12,500
143,750
625,000
9%
2026
$1,061,250
1,000,000
?
300,000
112,500
37,500
15,000
150,000
687,500
9%
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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