14.Farley Incorporated instituted a defined benefit pension plan for its employees at the beginning of 2006. An actuarial method that is acceptable under GAAP indicates that the company should...

14.Farley Incorporated instituted a defined benefit pension plan for its employees at the beginning of 2006. An actuarial method that is acceptable under GAAP indicates that the company should contribute $80,000 each year to the pension fund to cover the benefits that will be paid to the employees. Farley funded 80% in 2006 and 2007, 90% in 2008 and 2009, and 100 percent in 2010.

Required:

(1) Prepare the journal entries to accrue the pension liability and fund it for 2006 through 2010.

(2) Compute the balance in the pension liability account as of December 31, 2010.

15.On December 31, 2009, Barton Incorporated had total liabilities of $60,000 and total shareholders' equity of $90,000, resulting in a debt/equity ratio of 0.67 before income tax expense is recognized. On December 31, 2009, Barton paid its 2009 income taxes of $6,000 while its income tax expense on its 2009 income statement was $8,000. This difference exists because Barton uses straight-line depreciation on its books and double-declining-balance depreciation on its tax returns. What is Barton’s debt/equity ratio after the tax expense and deferred tax liability are recognized?