Webb Corp. sponsors a defined benefit pension plan for its employees

Webb Corp. sponsors a defined benefit pension plan for its employees

Question # 00090763 Posted By: Prof.Longines Updated on: 08/10/2015 07:50 AM Due on: 08/12/2015
Subject Accounting Topic Accounting Tutorials:
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Webb Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2014, the following balances relate to this plan.

Plan assets$480,000
Projected benefit obligation600,000
Pension asset/liability120,000
Accumulated OCI (PSC)100,000Dr.

As a result of the operation of the plan during 2014, the following additional data are provided by the actuary.

Service cost$90,000
Settlement rate, 9%
Actual return on plan assets55,000
Amortization of prior service cost19,000
Expected return on plan assets52,000
Unexpected loss from change in projected benefit obligation,
due to change in actuarial predictions		76,000
Contributions99,000
Benefits paid retirees85,000
Using the data above, compute pension expense for Webb Corp. for the year 2014 by preparing a pension worksheet.

WEBB CORP.
Pension Worksheet
General Journal EntriesMemo Record
ItemsAnnual Pension
Expense		CashOCI—Prior
Service Cost		OCI— Gain/
Loss		Pension Asset/
Liability		Projected Benefit
Obligation		Plan
Assets
Balance, Jan. 1, 2014$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.
Service cost Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Interest cost Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Actual return Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Unexpected gain Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Amortization of PSC Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Liability increase Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Contributions Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Benefits Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Journal entry for 2014$ Dr.Cr.$ Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Accumulated OCI, Dec. 31, 2013 Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr. Dr.Cr.
Balance, December 31, 2014$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.$ Dr.Cr.

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Prepare the journal entry for pension expense for 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and ExplanationDebitCredit

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    Tutorial # 00085154 Posted By: Prof.Longines Posted on: 08/10/2015 07:51 AM
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