Question

E20-7 (LO1,2,3) Basic Pension Worksheet The following defined pension data of Rydell Corp. apply to the year 2017. Projected benefit obligation, 1/1/17 (before amendment) $560,000 Plan assets, 1/1/17 546,200 Pension liability 13,800 "On January 1, 2017, Rydell Corp., through plan amendment, grants prior" service benefits having a present value of 120,000 Settlement rate 9% Service cost $58,000 Contributions (funding) 65,000 Actual (expected) return on plan assets 52,280 Benefits paid to retirees 40,000 Prior service cost amortization for 2017 17,000 Instructions: For 2017, prepare a pension worksheet for Rydell Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

Answer 1

Answer:

RYDELL CORP.
Pension Worksheet—2017
	General Journal Entries				Memo Record
Items
	Annual Pension Expense	Cash	OCI - Prior Service Cost	Pension Asset/ Liability	Projected Benefit Obligation	Plan Assets
Balance, Dec. 31, 2016				13,800 Cr	560,000 Cr	546,200 Dr
Prior service cost			120,000 Dr		120,000 Cr
Balance, January 1, 2017					680,000 Cr	546,200 Dr
Service cost	58,000 Dr				58,000 Cr
Interest cost	61,200 Dr				61,200 Cr
Actual return	52,280 Cr					52,280 Dr
Amortization of PSC	17,000 Dr		17,000 Cr
Contributions		65,000 Cr				65,000 Dr
Benefits					40,000 Dr	40,000 Cr
Journal entry for 2017	83,920 Dr	65,000 Cr	103,000 Dr	121,920 Cr
Accum. OCI, Dec. 31, 2016			0
Balance, Dec. 31, 2017			103,000 Dr	135,720 Cr	759,200 Cr	623,480 Dr