70.2K

Verified Solution

Link Copied!

On January 1, 2020, McGee Co. had the following balances:

Projected benefit obligation $7,800,000

Fair value of plan assets 7,800,000

Other data related to the pension plan for 2020:

Service cost 315,000

Contributions to the plan 459,000

Benefits paid 450,000

Actual return on plan assets 444,000

Settlement rate 9%

Expected rate of return 6%

No prior service cost, no prior OCI gains/losses

Required:

(a) Prepare the journal entry to record pension expense, the contributions for 2020 and adjustments to Pension Asset/Liability and OCI (g/l).

(b) Answer the following questions:

(1) What is the plan assets balance on 12/31/2020?

(2) What is the Pension Benefit Obligation balance at December 31, 2020?

(3) What is the ending balance in the pension asset/liability at December 31, 2020?

(4) What is Pension Expense for 2020?

A pension worksheet is provided to help you calculate and answer the questions, although you are not required to use it but feel free to fill it out here if you would like to. If you do, please make sure to answer the questions in the response area, do not expect to be graded only on what you might have included in the worksheet.

(a) Prepare the journal entry to record pension expense, the contributions for 2020 and adjustments to Pension Asset/Liability and OCI (g/l).

(enter Journal entry here)

-->

(b) Answer the following questions. Type your response after each question:

(1) What is the plan assets balance on 12/31/2020? -->

(2) What is the Pension Benefit Obligation balance at December 31, 2020? -->

(3) What is the ending balance in the pension asset/liability at December 31, 2020? -->

(4) What is Pension Expense for 2020? -->

McGee Company, Pension Worksheet2020
General Ledger Entries					Memo Record
Items	Annual Pension Expense	Cash	OCI Gains/losses	Pension Asset/Liability	Projected Benefit Obligation	Plan Assets
Journal Entry

Answer & Explanation Solved by verified expert

See Answer