Question

Exercise 20-4 The following facts apply to the pension plan of Boudreau Inc. for the year 2017 Plan assets, January 1, 2017 Projected benefit obligation, January 1, 2017 Settlement rate Service cost Contributions (funding) Actual and expected return on plan assets Benefits paid to retirees $490,000 490,000 896 40,000 25,000 49,700 33,400 Using the preceding data, compute pension expense for the year 2017. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2017 and the year-end balances in the related pension accounts. (Enter all amounts as positive.) BOUDREAU INC. Pension Worksheet-2017 General Journal Entries Memo Record Annual Pension Expense Pension Asset/ Liability Projected Benefit Obligation Plan AssetsS Items Balance, January 1, 2017 Service cost Interest cost Actual return Contributions Benefits Cash Journal entry, December 31 Balance, December 31, 2017 Question Attempts: o of 3 used

Answer 1

Annual Pension Cost: Service Cost Interest Cost (490,000 * 896) Actual & Expected Return on Plan Assets Pension Expense for 2017 40,000 39,200 -49,700 29,500 $ BOUDREAU INC PENSION WORKSHEET 2017 General Journal Entries Memo Record Pension Asset / Liability Annual Pension Projected Benefit Items Cash Plan Assets Expense 490,000 Cr $ Balance January 1, 2017 Service Cost Interest Cost Actual Return Contributions Benefits Journal Entry, December 31 $ Balance, December 31, 2017 490,000 Dr 40,000 Dr 39,200 Dr 49,700 Cr 40,000 Cr 39,200 Cr 49,700 Dr 25,000 Dr 33,400 Cr 25,000 Cr 33,400 Dr $ 29,500 Dr $ 25,000 Cr $ 4,500 Cr 4,500 Cr $ 535,800 Cr $ 531,300 Dr