Compute Pension Expense and do journal entry

timer Asked: Mar 24th, 2015

Question description

E20-1 (Pension Expense, Journal Entries) The following information is available for the pension plan of Radcliffe Company for the year 2014.

Actual and expected return on plan assets  $15,000
Benefits paid to retirees   $40,000
Contributions (funding)     $90,000
Interest/discount rate   10%
Prior service cost amortization   $8,000
Projected benefit obligation, (1/1/2014)    $500,000
Service cost   $60,000

(a)  Compute pension expense for the year 2012.

Computation of pension expense:   Service cost     $ 60,000  Interest cost*     $50,000  Return on plan assets      -$15,000  Prior service cost amortization    $8,000   Pension expense - 2014     $103,000

(b)  Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2012.

Pension Expense  103,000      Cash     95,000  Prepaid Pension Cost    8,000

Tutor Answer

(Top Tutor) Studypool Tutor
School: Carnegie Mellon University
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors