Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B.It takes a couple of days to assemble the information you need, but you finally get it all together and summarize it as follows:Pension Plan 2014 2015 Projected Benefit Obligation 65,000 Plan Assets (fair value), January 1 41,000 Pension asset/liability January 1 (credit) 24,000 Prior service cost, January 1 16,000 Service cost 4,000 5,900 Settlement rate 10% 10% Expected rate of return 10% 10% Actual return on plan assets 3,600 6,100 Amortization of prior service cost 7,000 5,500 Annual contributions 7,200 8,100 Benefits paid to retirees 3,150 5,400 Increase in pension benefit obligations due to actuarial assumptions 8,700 0 Accumulated benefit obligations at December 31 72,180 78,900 Average service life of all employees 20 years Vested benefit obligation—December 31 46,400 Tasks: Prepare a pension worksheet using Microsoft Excel for both years 2014 and 2015 and the necessary computations and amortization of the loss (2015), using the corridor approach. Prepare in the same worksheet the journal entries to reflect all pension plan transactions and events at December 31 of each year. For 2015, indicate (in the same worksheet) the pension amounts to be reported in the financial statements. In a 2 page Microsoft Word document, explain alternative measures for valuing the pension obligation. What would you advise for Panache?

Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B. It takes a...

Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B.

It takes a couple of days to assemble the information you need, but you finally get it all together and summarize it as follows:

Pension Plan

	2014	2015
Projected Benefit Obligation	65,000
Plan Assets (fair value), January 1	41,000
Pension asset/liability January 1 (credit)	24,000
Prior service cost, January 1	16,000
Service cost	4,000	5,900
Settlement rate	10%	10%
Expected rate of return	10%	10%
Actual return on plan assets	3,600	6,100
Amortization of prior service cost	7,000	5,500
Annual contributions	7,200	8,100
Benefits paid to retirees	3,150	5,400
Increase in pension benefit obligations due to actuarial assumptions	8,700	0
Accumulated benefit obligations at December 31	72,180	78,900
Average service life of all employees		20 years
Vested benefit obligation—December 31		46,400

Tasks:

Prepare a pension worksheet using Microsoft Excel for both years 2014 and 2015 and the necessary computations and amortization of the loss (2015), using the corridor approach.

Prepare in the same worksheet the journal entries to reflect all pension plan transactions and events at December 31 of each year.

For 2015, indicate (in the same worksheet) the pension amounts to be reported in the financial statements.

In a 2 page Microsoft Word document, explain alternative measures for valuing the pension obligation. What would you advise for Panache?

Answered Same DayJul 22, 2022

Answer To: Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the...

Sandeep answered on Jul 22 2022

71 Votes

Sheet1
        Pension Worksheet for 2014
            GENERAL JOURNAL ENTRIES                        MEMO RECORD
                    OCI
        Items    Annual Pension Expense    Cash     Prior Service Cost(PSC)    Gain/Loss    Pension Assest/Liability        Projected Benefit Obligation    Plan Assest
        Balance, Jan 1 ,2014                    (24,000)        (65,000)    41000
        Prior Service Cost            16000                (16,000)
        Adj. Bal. 1/1/14                            (81,000)    41,000
        Service Cost    4000                        (4,000)
        Interest cost    6500                        -6500
        Actual Return     -3600                            3600
        Unexpected Loss    -2900            2900
        Amortization of PSC     7000        -7000
        Liability Increase                8700            -8700
        Annual Contributions        -7200                        7200
        Benefits Paid                            3150    -3150
        Journal Entry for...

SOLUTION.PDF

Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B. It takes a...

Answer To: Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the...

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