70.2K

Verified Solution

Link Copied!

Problem 20-3 Pharoah Company sponsors a defined benefit plan for its 100 employees. On January 1, 2017, the companys actuary provided the following information. Accumulated other comprehensive loss (PSC) $149,000 Pension plan assets (fair value and market-related asset value) 200,700 Accumulated benefit obligation 262,600 Projected benefit obligation 377,100 The average remaining service period for the participating employees is 10 years. All employees are expected to receive benefits under the plan. On December 31, 2017, the actuary calculated that the present value of future benefits earned for employee services rendered in the current year amounted to $50,400; the projected benefit obligation was $499,300; fair value of pension assets was $277,700; the accumulated benefit obligation amounted to $368,800. The expected return on plan assets and the discount rate on the projected benefit obligation were both 10%. The actual return on plan assets is $11,300. The companys current years contribution to the pension plan amounted to $65,700. No benefits were paid during the year. Determine the components of pension expense that the company would recognize in 2017. (With only one year involved, you need not prepare a worksheet.) (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Components of Pension Expense $ $ Prepare the journal entry to record the pension expense and the companys funding of the pension plan in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Compute the amount of the 2017 increase/decrease in gains or losses and the amount to be amortized in 2017 and 2018. 2017 Increase/Decrease in $ Amortization in 2017 $ Amortization in 2018 $ Indicate the pension amounts reported in the financial statement as of December 31, 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -15,630 or parentheses e.g. (15,630).) Pharoah Company Income Statement (Partial) $ Pharoah Company Comprehensive Income Statement $XXXX $ $XXXX Pharoah Company Balance Sheet (Partial) $ $ $

Answer & Explanation Solved by verified expert

See Answer