Information provided by Pension Plan Actuary: a. Projected benefit obligation at
ID: 2482331 • Letter: I
Question
Information provided by Pension Plan Actuary: a. Projected benefit obligation at Dec. 31, 2013 $1,815 b. Prior service cost from plan amendment on January 1, 2014 (straight-line amortization for 10-year average remaining service period.) 300 c. Service cost for 2014 560 d. Service cost for 2015 575 e. Discount rate used by actuary on projected benefit obligation for 2013 & 2014 10% f. Payments to retirees in 2014 460 g. Payments to retirees in 2015 520 h. No changes in actuarial assumptions or estimates i. Net gain -- AOCI on January 1, 2014 250 j. Net gains and losses are amortized for 10 years beginning in 2014 Information provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2014 $1,755 b. 2014 contributions 550 c. 2015 contributions 610 d. Expected long-term rate of return on plan assets 12% e. 2014 actual return on plan assets 255 f. 2015 actual return on plan assets 362 Required: 1. Calculate pension expense for 2014 & 2015. 2. Determine the balances in the PBO and Plan Asset accounts at December 31, 2014 and 2015. 3. Prepare the journal entries for 2014 and 2015 to record pension expense 4. Prepare the journal entries for 2014 and 2015 to record any gains and losses and new prior service cost. 5. Prepare the journal entries for 2014 and 2015 to record the cash contributions to plan assets and benefits paid to retirees. Information provided by Pension Plan Actuary: a. Projected benefit obligation at Dec. 31, 2013 $1,815 b. Prior service cost from plan amendment on January 1, 2014 (straight-line amortization for 10-year average remaining service period.) 300 c. Service cost for 2014 560 d. Service cost for 2015 575 e. Discount rate used by actuary on projected benefit obligation for 2013 & 2014 10% f. Payments to retirees in 2014 460 g. Payments to retirees in 2015 520 h. No changes in actuarial assumptions or estimates i. Net gain -- AOCI on January 1, 2014 250 j. Net gains and losses are amortized for 10 years beginning in 2014 Information provided by Pension Fund Trustee: a. Plan asset balance at fair value on January 1, 2014 $1,755 b. 2014 contributions 550 c. 2015 contributions 610 d. Expected long-term rate of return on plan assets 12% e. 2014 actual return on plan assets 255 f. 2015 actual return on plan assets 362 Required: 1. Calculate pension expense for 2014 & 2015. 2. Determine the balances in the PBO and Plan Asset accounts at December 31, 2014 and 2015. 3. Prepare the journal entries for 2014 and 2015 to record pension expense 4. Prepare the journal entries for 2014 and 2015 to record any gains and losses and new prior service cost. 5. Prepare the journal entries for 2014 and 2015 to record the cash contributions to plan assets and benefits paid to retirees.Explanation / Answer
For the year 2014 All amount in $ Items Annual Pension Expense Cash OCI - Prior Service Cost OCI - Gain/Loss Pension Asset/Liability Projected Benefit Obligation Plan Assets 300 -250 -60 -1,815 1,755 Service Cost 560 -560 Expected Return -211 -44 255 Interest Cost 182 -182 Aort. PSC 5 -30 25 Contributions -550 550 Benefit Paid 460 -460 Journal Entry 536 -550 -30 -19 63 -3 -2,097 2,100 For the year 2015 All amount in $ Items Annual Pension Expense Cash OCI - Prior Service Cost OCI - Gain/Loss Pension Asset/Liability Projected Benefit Obligation Plan Assets 270 -225 3 -2,097 2,100 Service Cost 575 -575 Expected Return -252 -110 362 Interest Cost 210 -210 Aort. PSC 5 -30 25 Contributions -610 610 Benefit Paid 520 -520 Journal Entry 538 -610 -30 -85 187 -190 -2,362 2,552