A.

Cooper 1

Aleshia Cooper
Tuesday, 11 March, 2014
Accounts 305 -01
Mr. Terrance Richards
Homework Questions: E: 20-2, 4, 5, 6, 7, 8, 12 And 15

Exercise 20-2
Computation of pension expense:
Service cost 90,000
Interest cost ($700,000 10%) 70,000
Actual (expected) return on plan assets (64,000)
Unrecognized prior service cost
amortization
10,000
Pension expense for 2014 106,000













A. Cooper 2


Exercise 20-4

Boudreau Inc.
Pension Worksheet2014
General Journal Entries Memo Record
Items Annual
Pension
Expense
Cash OCI -
Prior
Service
Cost
Pension
Asset/
Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, January 1, 2013 490,000
Cr
490,000
Dr
(a) Service cost 40,000 Dr 40,000 Cr
(b) Interest cost 39,200 Dr 39,200 Cr
(c) Actual return 49,700Cr 49,700
Dr
(d) Amortization of PSC 25,000
Dr
(e) Contributions 25,000 Cr 33,400
Cr
(f) Benefits
Journal entry, December 31 29,500 Dr 25,000 Cr 4,500 Cr
Balance, December 31, 2014 4,500 Cr 535,800
Cr
531,300
Dr










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Exercise 20-5

Computation of Service-Years

Cost per service-year: $72,000 24 = $3,000


Computation of Annual Prior Service Cost Amortization

Year Total Service-Years Cost Per Service-Year Annual Amortization
2014 5 $3,000 $15,000
2015 5 3,000 15,000
2016 5 3,000 15,000
2017 4 3,000 12,000
2018 3 3,000 9,000
2019 2 3,000 6,000
Total $72,000






Year Jim Paul Nancy Dave Kathy Total
2014 1 1 1 1 1 5
2015 1 1 1 1 1 5
2016 1 1 1 1 1 5
2017 1 1 1 1 4
2018 1 1 1 3
2019 1 1 2
Total 3 4 5 6 6 24
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Exercise 20-6

DATE ACCOUNT Debit Credit
12/31/14 Fair value of plan assets at $2,725,000
1/1/14 Fair value of plan assets at
(2,400,000)
Increase in fair value of plan assets 325,000
2014 Deduct: Contributions to plan 280,000
2014 Less benefits paid 350,000 (70,000)
2014 Actual return on plan assets
395,000















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Exercise 20-7









RYDELL CORP.
Pension Worksheet2014
General Journal Entries Memo Record
Items Annual
Pension
Expense
Cash OCI -
Prior
Service
Cost
Pension
Asset/
Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, January 1, 2013 (13,800) (560,000) 546,200
(a) Prior service cost 120,000 (120,000)
New balance, January 1, 2014 (680,000) 546,200
(b) Service cost 58,000 (58,000)
(c) Interest cost 61,200 (61,200)
(d) Actual return (52,280) 52,280
(e) Amortization of PSC 17,000 (17,000)
(f) Contributions (65,000) 65,000
(g) Benefits 40,000 (40,000)
Journal entry, December 31 83,920 (65,000) 103,000 (121,920)
Accumulated OCI, December 31,
2013
0
Balance, December 31, 2014 103,000 (135,720) (759,200) 623,480
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Exercise 20-8


Year
Projected Benefit
Obligation (a)

Plan
Assets

10% Corridor

Accumulated
OCI (G/L) (a)
Minimum
Amortization of
Loss
2013 $2,000,000 $1,900,000 $200,000 $ 0 $ 0
2014 2,400,000 2,500,000 250,000 280,000 3,000(b)
2015 2,950,000 2,600,000 295,000 367,000(c) 6,000(d)
2016 3,600,000 3,000,000 360,000 372,000(e) 1,000(f)

Working
(a) As of the beginning of the year.
(b) ($280,000 $250,000) 10 years = $3,000
(c) $280,000 $3,000 + $90,000 = $367,000
(d) ($367,000 $295,000) 12 years = $6,000
(e) $367,000 $6,000 + $11,000 = $372,000
(f) ($372,000 $360,000) 12 years = $1,000












A. Cooper 7

Exercise 20-12

ACCOUNT Debit Credit
Pension Expense 450,640
Other Comprehensive Income (PSC) 410,000
Other Comprehensive Income (G/L) 99,360
Cash 285,000
Pension Asset/Liability 675,000


ACCOUNT Debit Credit
Service cost 77,000
Interest cost ($500,000 10%) 150,000
Actual (expected) return on plan assets (80,000)
Unrecognized prior service cost amortization 120,000
Pension expense for 2014 267,000











A. Cooper 8


Pension Worksheet2014 and 2015
General Journal Entries Memo Record
Items Annual
Pension
Expense
Cash OCI -
Prior
Service
Cost
OCI -
Gain/Loss
Pension
Asset/
Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2014 (300,000) (4,500,000) 4,200,000
(a) Service cost 150,000 (150,000)
(b) Interest cost 450,000 (450,000)
(c) Actual return (252,000) 252,000
(d) Contributions (240,000) 240,000
(e) Benefits 200,000 (200,000)
Journal entry,
12/31/14
348,000 (240,000) 0 0 (108,000)
Accum OCI, 12/31/13
Balance, Dec. 31, 2014 (408,000) (4,900,000) 4,492,000
(f) Additional PSC 500,000 (500,000)
January 1, 2015 (5,400,000)
(g) Service cost 180,000 (180,000)
(h) Interest cost 540,000 (540,000)
(i) Actual return (260,000) 260,000
(j) Unexpected loss (99,360) 99,360
(k) Amortization of
PSC
90,000 (90,000)
(l) Contributions (285,000) 285,000
(m) Benefits 280,000 (280,000)
Journal entry,
12/31/15
450,640 (285,000) 410,000 99,360 (675,000)
Accum OCI, 12/31/14 0 0
Balance, Dec. 31, 2015 410,000 99,360 (1,083,000) (5,840,000) 4,757,000








A. Cooper 9

Exercise 20-15

ACCOUNT Debit Credit
Other Comprehensive Income (G/L) 100
Pension Expense 480
Pension Asset /Liability 120
Cash 700



ACCOUNT Debit Credit
Service cost $60,000
Interest cost ($500,000 10%) 50,000
Actual (expected) return on plan assets (15,000)
Unrecognized prior service cost amortization 8,000
Pension expense for 2014 $103,000













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General Journal Entries Memo Record
Entries



Annual
Pension
Expense
Cash Pension
Asset/Liabilit
y
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2014 25,000 Cr. 700,000
Cr.
675,000
Dr.
Service cost 80,000
Dr.
80,000 Cr.
Interest cost 70,000
Dr.
70,000 Cr.
Actual return 10,000
Cr.
10,000
Dr.
Amortization of PSC
Contributions 150,000
Cr.
150,000
Dr.
Benefits



35,000 Dr. 35,000 Cr.
Journal entry for 2014 140,000
Dr.
150,000
Cr.
10,000 Cr.


Balance, Dec. 31, 2014 15,000 Cr. 815,000
Cr.
800,000
Dr.
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