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Homework Problem 72 Pensions

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Ben. Oblig. 125,000. Adjusted for Accr/Prep Account $0 ... Ben. Oblig. 10,000. Adjusted for Accr/Prep Account $37,000 (Beg. Bal.) (125,000 -130,000) 32,000 ... – PowerPoint PPT presentation

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Title: Homework Problem 72 Pensions


1
Homework Problem 7-2Pensions
  • Accounting 521

2
19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
3
  • Prior to 19x6, Expense Contribution
  • Market-related Asset Value FMV of Plan Assets

4
Journal Entries, 19x6
  • Pension Expense
  • Accr./Prep. Pension Costs
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

5
Journal Entries, 19x6
  • Pension Expense
  • Accr./Prep. Pension Costs
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
6
Journal Entries, 19x6
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
7
Journal Entries, 19x6
19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

8
Journal Entries, 19x6
19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

9
Journal Entries, 19x6
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

10
Journal Entries, 19x6
19x6 Minimum Liability Accum. Benefit
Obligation 425,000 Plan Assets (at
FMV) 300,000 Unfunded Accum. Ben.
Oblig. 125,000 Adjusted for Accr/Prep
Account 0 (Beg. Bal.) (110,000 - 95,000)
15,000 Additional Liability Required 140,000
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000
11
Journal Entries, 19x6
19x6 Minimum Liability Accum. Benefit
Obligation 425,000 Plan Assets (at
FMV) 300,000 Unfunded Accum. Ben.
Oblig. 125,000 Adjusted for Accr/Prep
Account 0 (Beg. Bal.) (110,000 - 95,000)
15,000 Additional Liability Required 140,000
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000
12
Journal Entries, 19x6
19x6 Minimum Liability Accum. Benefit
Obligation 425,000 Plan Assets (at
FMV) 300,000 Unfunded Accum. Ben.
Oblig. 125,000 Adjusted for Accr/Prep
Account 0 (Beg. Bal.) (110,000 - 95,000)
15,000 Additional Liability Required 140,000
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

Pension Expense 95,000 Accr./Prep.
Pension Costs 95,000 Accr./Prep. Pension
Costs 110,000 Cash in Bank 110,000
13
Journal Entries, 19x6
19x6 Minimum Liability Accum. Benefit
Obligation 425,000 Plan Assets (at
FMV) 300,000 Unfunded Accum. Ben.
Oblig. 125,000 Adjusted for Accr/Prep
Account 0 (Beg. Bal.) (110,000 - 95,000)
15,000 Additional Liability Required 140,000
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost 140,000
  • Additional Pension Liability 140,000

14
Journal Entries, 19x6
  • Pension Expense 95,000
  • Accr./Prep. Pension Costs 95,000
  • Accr./Prep. Pension Costs 110,000
  • Cash in Bank 110,000
  • Intang. Asset - Def. Pension Cost 140,000
  • Additional Pension Liability 140,000

15
Journal Entries, 19x7
  • Pension Expense
  • Accr./Prep. Pension Costs
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

16
Journal Entries, 19x7
  • Pension Expense
  • Accr./Prep. Pension Costs
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
17
Journal Entries, 19x7
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
18
Journal Entries, 19x7
19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs
  • Cash in Bank
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19
Journal Entries, 19x7
19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

20
Journal Entries, 19x7
19x7 Minimum Liability Accum. Benefit
Obligation 547,000 Plan Assets (at
FMV) 417,000 Unfunded Accum. Ben.
Oblig. 130,000 Adjusted for Accr/Prep
Account 15,000 (Beg. Bal.) (150,000
-128,000) 37,000 Total Liability
Required 167,000
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000
21
Journal Entries, 19x7
19x7 Minimum Liability Accum. Benefit
Obligation 547,000 Plan Assets (at
FMV) 417,000 Unfunded Accum. Ben.
Oblig. 130,000 Adjusted for Accr/Prep
Account 15,000 (Beg. Bal.) (150,000
-128,000) 37,000 Total Liability
Required 167,000
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000
22
Journal Entries, 19x7
19x7 Minimum Liability Accum. Benefit
Obligation 547,000 Plan Assets (at
FMV) 417,000 Unfunded Accum. Ben.
Oblig. 130,000 Adjusted for Accr/Prep
Account 15,000 (Beg. Bal.) (150,000
-128,000) 37,000 Total Liability
Required 167,000
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

Adjusted for Accr/Prep Account 0 (Beg. Bal.)
(110,000 - 95,000) 15,000
23
Journal Entries, 19x7
19x7 Minimum Liability Accum. Benefit
Obligation 547,000 Plan Assets (at
FMV) 417,000 Unfunded Accum. Ben.
Oblig. 130,000 Adjusted for Accr/Prep
Account 15,000 (Beg. Bal.) (150,000
-128,000) 37,000 Total Liability
Required 167,000
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

Pension Expense 128,000 Accr./Prep.
Pension Costs 128,000 Accr./Prep.
Pension Costs 150,000 Cash in
Bank 150,000
Adjusted for Accr/Prep Account 0 (Beg. Bal.)
(110,000 - 95,000) 15,000
24
Journal Entries, 19x7
19x7 Minimum Liability Accum. Benefit
Obligation 547,000 Plan Assets (at
FMV) 417,000 Unfunded Accum. Ben.
Oblig. 130,000 Adjusted for Accr/Prep
Account 15,000 (Beg. Bal.) (150,000
-128,000) 37,000 Total Liability
Required 167,000 Balance 140,000 Addit
ional Liability Required 27,000
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

25
Journal Entries, 19x7
19x7 Minimum Liability Accum. Benefit
Obligation 547,000 Plan Assets (at
FMV) 417,000 Unfunded Accum. Ben.
Oblig. 130,000 Adjusted for Accr/Prep
Account 15,000 (Beg. Bal.) (150,000
-128,000) 37,000 Total Liability
Required 167,000 Balance 140,000 Addit
ional Liability Required 27,000
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Intang. Asset - Def. Pension Cost 27,000
  • Additional Pension Liability 27,000

26
Journal Entries, 19x7
  • Pension Expense 128,000
  • Accr./Prep. Pension Costs 128,000
  • Accr./Prep. Pension Costs 150,000
  • Cash in Bank 150,000
  • Additional Pension Liability 27,000
  • Intang. Asset - Def. Pension Cost 27,000

27
Journal Entries, 19x8
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
28
Journal Entries, 19x8
19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000 Pension Expense ................
........ 95,000 128,000
130,000 Employers Funding Contribution
110,000 150,000 125,000 Prior Service Cost
Not Yet Recognized in Earnings ........
553,846 509,538 467,077
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

29
Journal Entries, 19x8
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

30
Journal Entries, 19x8
19x8 Minimum Liability Accum. Benefit
Obligation 601,000 Plan Assets (at
FMV) 611,000 Excess Accum. Ben. Oblig.
10,000 Adjusted for Accr/Prep Account 37,000
(Beg. Bal.) (125,000 -130,000)
32,000 Liability to be Eliminated 167,000
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000
31
Journal Entries, 19x8
19x8 Minimum Liability Accum. Benefit
Obligation 601,000 Plan Assets (at
FMV) 611,000 Excess Accum. Ben. Oblig.
10,000 Adjusted for Accr/Prep Account 37,000
(Beg. Bal.) (125,000 -130,000)
32,000 Liability to be Eliminated 167,000
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

19x6 19x7 19x8 Plan Assets (at
FMV) .................. 300,000 417,000 611,000
Accum. Benefit Obligation ......... 425,000
547,000 601,000
32
Journal Entries, 19x8
19x8 Minimum Liability Accum. Benefit
Obligation 601,000 Plan Assets (at
FMV) 611,000 Excess Accum. Ben. Oblig.
10,000 Adjusted for Accr/Prep Account 37,000
(Beg. Bal.) (125,000 -130,000)
32,000 Liability to be Eliminated 167,000
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

Adjusted for Accr/Prep Account 15,000 (Beg.
Bal.) (150,000 -128,000) 37,000
33
Journal Entries, 19x8
19x8 Minimum Liability Accum. Benefit
Obligation 601,000 Plan Assets (at
FMV) 611,000 Excess Accum. Ben. Oblig.
10,000 Adjusted for Accr/Prep Account 37,000
(Beg. Bal.) (125,000 -130,000)
32,000 Liability to be Eliminated 167,000
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

Pension Expense 125,000 Accr./Prep.
Pension Costs 125,000 Accr./Prep.
Pension Costs 130,000 Cash in
Bank 130,000
34
Journal Entries, 19x8
19x8 Minimum Liability Accum. Benefit
Obligation 601,000 Plan Assets (at
FMV) 611,000 Excess Accum. Ben. Oblig.
10,000 Adjusted for Accr/Prep Account 37,000
(Beg. Bal.) (125,000 -130,000)
32,000 Liability to be Eliminated 167,000
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Intang. Asset - Def. Pension Cost
  • Additional Pension Liability

35
Journal Entries, 19x8
19x8 Minimum Liability Accum. Benefit
Obligation 601,000 Plan Assets (at
FMV) 611,000 Excess Accum. Ben. Oblig.
10,000 Adjusted for Accr/Prep Account 37,000
(Beg. Bal.) (125,000 -130,000)
32,000 Liability to be Eliminated 167,000
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Additional Pension Liability 167,000
  • Intang. Asset - Def. Pension Cost 167,000

36
Journal Entries, 19x8
  • Pension Expense 130,000
  • Accr./Prep. Pension Costs 130,000
  • Accr./Prep. Pension Costs 125,000
  • Cash in Bank 125,000
  • Additional Pension Liability 167,000
  • Intang. Asset - Def. Pension Cost 167,000

37
The End
  • Homework Problem 7-2
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