The Donna Company adopted a defined benefit pension plan on January 1, 2016, and prior service cr granted to employees. As of January 1, 2016, the prior service cost is $68,250. The unrecognized pric cost is amortized by the straight-line method over the remaining 15-year service life of the company's employees. Funding for the pension plan was $170,745 and $186,933 at December 31, 2016 and 2017 respectively. Annual service cost Discount (interest) rate 2016 $161,877 2017 $178,065 8%

The Donna Company adopted a defined benefit pension plan on January 1, 2016, and prior service cr granted to employees. As of January 1, 2016, the prior service cost is $68,250. The unrecognized pric cost is amortized by the straight-line method over the remaining 15-year service life of the company's employees. Funding for the pension plan was $170,745 and $186,933 at December 31, 2016 and 2017 respectively. Annual service cost Discount (interest) rate 2016 $161,877 2017 $178,065 8%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 4RE

See similar textbooks

Similar questions

Given the following information for Tyler Companys pension plan at the beginning of the year, calculate the corridor, excess net loss (gain), and amortized net loss (gain). Assume an average remaining service life of 15 years.
On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,140,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016: Employee Expected Years of Future Service A 1 B 3 C 4 D 5 E 5 F 6 Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the components of Baznik’s pension expense, in addition to the amortization of the prior service cost for 2016 and 2017: 2016 2017 Service cost $542,500 $558,073 Interest cost on projected benefit obligation 104,000 146,637 Expected return on plan assets —…
Lewis Industries adopted a defined benefit pension plan on January 1, 2018. By making the provisions of theplan retroactive to prior years, Lewis incurred a prior service cost of $2 million. The prior service cost wasfunded immediately by a $2 million cash payment to the fund trustee on January 2, 2018. However, the cost isto be amortized (expensed) over 10 years. The service cost—$250,000 for 2018—is fully funded at the end ofeach year. Both the actuary’s discount rate and the expected rate of return on plan assets were 9%. The actualrate of return on plan assets was 11%. At December 31, the trustee paid $16,000 to an employee who retiredduring 2018.Required:Determine each of the following amounts as of December 31, 2018, the fiscal year-end for Lewis:1. Projected benefit obligation2. Plan assets3. Pension expense
On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,290,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016: Employee Expected Years of Future Service A 1 B 4 D E F 6 Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the components of Baznik's pension expense, in addition to the amortization of the prior service cost for 2016 and 2017: 2016 2017 Service cost $386,800 $410,683 Interest cost on projected benefit obligation 116,800 174,737 Expected return on plan assets 93,000 Baznik contributed $799,800 and $759,200 to the…
Lewis Industries adopted a defined benefit pension plan on January 1, 2016. By making the provisions of the plan retroactive to prior years, Lewis incurred a prior service cost of $2 million. The prior service cost was funded immediately by a $2 million cash payment to the fund trustee on January 2, 2016. However, the cost is to be amortized (expensed) over 10 years. The service cost—$250,000 for 2016—is fully funded at the end of each year. Both the actuary’s discount rate and the expected rate of return on plan assets were 9%. The actual rate of return on plan assets was 11%. At December 31, the trustee paid $16,000 to an employee who retired during 2016. Required: Determine each of the following amounts as of December 31, 2016, the fiscal year-end for Lewis: 1. Projected benefit obligation 2. Plan assets 3. Pension expense