Pension
sshrryComplete the following exercise. Submit journal entries in an Excel file and written segments in an MS Word document. Label each question clearly.
Melanie Vail Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2012, the following balances relate to this plan.
Plan assets | $480,000 |
Projected benefit obligation | 625,000 |
Accumulated OCI (PSC) | 100,000 Dr. |
As a result of the operation of the plan during 2012, the following additional data are provided by the actuary.
Service cost for 2012 | $90,000 |
Settlement rate | 9% |
Actual return on plan assets in 2012 | 57,000 |
Amortization of prior service cost | 19,000 |
Expected return on plan assets | 52,000 |
Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions | 76,000 |
Contributions in 2012 | 99,000 |
Benefits paid retirees in 2012 | 85,000 |
attched file is the spreadsheets you will need for this exercise.
- Use the spreadsheet Pensions to prepare a pension worksheet. On the pension worksheet, compute pension expense, pension asset/liability, projected benefit obligation, plan assets, prior service cost, and net gain or loss.
- Compute the same items as in (1), assuming that the settlement rate is now 7% and the expected rate of return is 10%.
- Prepare the journal entry using the spreadsheet Journal Entries to record pension expense in 2012.
- Indicate the reporting of the 2012 pension amounts in the income statement and balance sheet using the spreadsheet Pensions.
- 10 years ago
- 20
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ACC - Melanie Vail Corp. sponsors a defined benefit pension plan for its employees
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