Metlock Co. has the following postretirement benefit planbalances on January 1, 2020.Accumulated postretirement benefit...Metlock...

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Accounting

Metlock Co. has the following postretirement benefit planbalances on January 1, 2020.
Accumulated postretirement benefit obligation $2,239,000
Fair value of plan assets 2,239,000

The interest (settlement) rate applicable to the plan is 10%. OnJanuary 1, 2021, the company amends the plan so that prior servicecosts of $177,000 are created. Other data related to the planare:
2020
2021
Service costs $75,000 $85,000
Prior service costs amortization 0 12,000
Contributions (funding) to the plan 45,000 35,000
Benefits paid 41,000 45,000
Actual return on plan assets 142,000 119,000
Expected rate of return on assets 8 % 6
%
1. Prepare a worksheet for the postretirement plan in 2020.
2.Prepare any journal entries related to the postretirement planthat would be needed at December 31, 2020.
3.Prepare a worksheet for 2021
4.Prepare journal entries related to the postretirement plan asof December 31, 2021.
5. Indicate the postretirement-benefit–related amounts reportedin the 2021 financial statements.

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3.7 Ratings (732 Votes)

Metlock Co General Journal Entries Memo Record Annual Pension Expense Cash OCIGainloss Pension Assetsliability Projected benefit obligation Plan Assets Balance 112020 223900000 223900000 Service Costgiven 7500000 7500000 Interest Cost223900010 22390000 22390000 Actual Return223900010 22390000 22390000 Contributionsgiven 4500000 See Answer

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In: AccountingMetlock Co. has the following postretirement benefit planbalances on January 1, 2020.Accumulated postretirement benefit...Metlock Co. has the following postretirement benefit planbalances on January 1, 2020.Accumulated postretirement benefit obligation$2,239,000Fair value of plan assets2,239,000The interest (settlement) rate applicable to the plan is 10%. OnJanuary 1, 2021, the company amends the plan so that prior servicecosts of $177,000 are created. Other data related to the planare:20202021Service costs$75,000$85,000Prior service costs amortization012,000Contributions (funding) to the plan45,00035,000Benefits paid41,00045,000Actual return on plan assets142,000119,000Expected rate of return on assets8%6%1. Prepare a worksheet for the postretirement plan in 2020.2.Prepare any journal entries related to the postretirement planthat would be needed at December 31, 2020.3.Prepare a worksheet for 20214.Prepare journal entries related to the postretirement plan asof December 31, 2021.5. Indicate the postretirement-benefit–related amounts reportedin the 2021 financial statements.

Accumulated postretirement benefit obligation		$2,239,000
Fair value of plan assets		2,239,000

	2020		2021
Service costs	$75,000		$85,000
Prior service costs amortization	0		12,000
Contributions (funding) to the plan	45,000		35,000
Benefits paid	41,000		45,000
Actual return on plan assets	142,000		119,000
Expected rate of return on assets	8	%	6	%