PROBLEM 20-7B
MANGROVE CORP.
Pension Worksheet—2014
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
160,000 Cr.
520,000 Cr.
360,000 Dr.
Service cost
94,000 Dr.
94,000 Cr.
Interest cost*
31,200 Dr.
31,200 Cr.
Actual return
36,000 Cr.
48,000 Dr.
Unexpected gain**
Amortization of PSC
21,000 Dr.
Amortization of loss***
Contributions
80,000 Cr.
Benefits
74,000 Dr.
74,000 Cr.
Journal entry for 2014
Accumulated OCI, Dec. 31, 2013
Balance, Dec. 31, 2014
91,900 Dr.
169,200 Cr.
571,200 Cr.
*$31,200 = $520,000 X 6%.
**$7,200 = ($360,000 X 8%) – $36,000.
***
Year
1/1 Projected
Benefit
Obligation
Value of 1/1
Plan Assets
10%
Corridor
Accumulated
OCI (G/L), 1/1
Minimum
Amortization of
Loss for 2014
PROBLEM 20-8B
(a) LEMKE COMPANY
Pension Worksheet—2014 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
160,000 Cr.
600,000 Cr.
440,000 Dr.
Service cost
72,000 Dr.
72,000 Cr.
Interest cost(a)
48,000 Dr.
48,000 Cr.
Actual return
60,000 Cr.
60,000 Dr.
Unexpected gain(b)
24,800 Dr.
24,800 Cr.
Amortization of PSC
80,000 Dr.
Contributions
87,000 Cr.
87,000 Dr.
Benefits
59,000 Dr.
59,000 Cr.
Increase in PBO
143,000 Cr.
Journal entry for 2014
87,000 Cr.
Accumulated OCI, Dec. 31, 2013
400,000 Dr.
0
Balance, Dec. 31, 2014
320,000 Dr.
118,200 Dr.
276,000 Cr.
804,000 Cr.
Service cost
95,000 Dr.
95,000 Cr.
Interest cost(c)
64,320 Dr.
64,320 Cr.
Actual return
54,000 Cr.
54,000 Dr.
Unexpected gain(d)
11,760 Dr.
11,760 Cr.
Amortization of PSC
125,000 Cr.
Amortization of loss(e)
3,100 Dr.
Contributions
102,000 Dr.
Benefits
63,000 Dr.
63,000 Cr.
Accumulated OCI, Dec. 31, 2014
118,200 Dr.
Balance, Dec. 31, 2015
103,340 Dr.
279,320 Cr.
900,320 Cr.
PROBLEM 20-8B (Continued)
Worksheet computations:
(a)$48,000 = $600,000 X 8%.
(b) 2014
Pension Expense ………………………………………………. 164,800
Other Comprehensive Income (G/L) ……………………. 118,200
Cash ………………………………………………………….. 87,000
PROBLEM 20-8B (Continued)
(c) Financial Statements—2015
Income Statement
Pension expense …………………………………….. $245,180
Comprehensive Income Statement
Net Income ……………………………………………………. $ XXXX
Other comprehensive income (loss)
Asset gain (loss) ……………………………………… $ 11,760
PROBLEM 20-9B
(a) See worksheet on next page.
(b) December 31, 2014
Other Comprehensive Income (G/L) …………………. 25,000
(c) See worksheet on next page. The entry is below.
December 31, 2015
(d) Financial Statements—2015
Income Statement
Pension expense ……………………………………… $681,450
Balance Sheet
PROBLEM 20-9 (Continued)
(a) DENVER DRILL COMPANY
Pension Worksheet—2014 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
2,500,000 Cr.
2,500,000 Dr.
Service cost
340,000 Dr.
340,000 Cr.
Interest cost(a)
200,000 Dr.
200,000 Cr.
Actual return
75,000 Cr.
75,000 Dr.
Unexpected loss(b)
25,000 Cr.
25,000 Dr.
Contributions
276,000 Cr.
276,000 Dr.
Benefits
240,000 Dr.
240,000 Cr.
Journal entry for 2014
440,000 Dr.
276,000 Cr.
25,000 Dr.
Accumulated OCI Dec. 31, 2013
0
Balance, Dec. 31, 2014
25,000 Dr.
2,800,000 Cr.
2,611,000 Dr.
Additional PSC, 1/1/2015
Balance, Jan. 1, 2015
3,700,000 Cr.
Service cost
375,000 Dr.
375,000 Cr.
Interest cost(c)
296,000 Dr.
296,000 Cr.
Actual return
150,000 Cr.
150,000 Dr.
Unexpected gain(d)
19,450 Dr.
19,450 Cr.
Amortization of PSC
121,000 Dr.
Contributions
318,000 Cr.
318,000 Dr.
Benefits
306,000 Dr.
306,000 Cr.
Journal entry for 2015
661,450 Dr.
318,000 Cr.
1,103,000 Cr.
Accumulated OCI, Dec. 31, 2014
25,000 Dr.
Balance, Dec. 31, 2015
1,292,000 Cr.
4,065,000 Cr.
2,773,658 Dr.
RIVIERA COMPANY
(a) Completed Worksheet—2014
General Journal Entries Memo Record
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
OCI—
Gain/Loss
Pension
Asset /
Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2014
78,000 Cr.
468,000 Cr.
390,000 Dr.
(b) 2014
Pension Expense …………………………………………………………………… 135,400
Other Comprehensive Income (G/L) ………………………………………… 39,600
Cash …………………………………………………………………………… 65,000
(c) 1. Settlement Rate: $46,800 ÷ $468,000 = 10%
Service cost
Interest cost
Actual return
Unexpected gain
Amortization of PSC
Contributions
Benefits
Journal entry for 2014
Balance, Dec. 31, 2014
RIVIERA COMPANY
(a) Completed Worksheet—2015
General Journal Entries Memo Record
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
OCI—
Gain/Loss
Penison
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2015
156,000 Cr.
600,000 Cr.
444,000 Dr.
Service cost
86,000 Dr.
86,000 Cr.
Interest cost
60,000 Dr.
60,000 Cr.
Actual return
28,000 Cr.
28,000 Dr.
PROBLEM 20-11B
Unexpected gain
Amortization of PSC
36,000 Dr.
36,000 Cr.
Contributions
70,000 Cr.
70,000 Dr.
Benefits
39,000 Dr.
Journal entry for 2015
70,000 Cr.
Accumulated OCI, Dec. 31, 2014
Balance, Dec. 31, 2015
PROBLEM 20–11B (Continued)
Worksheet computations:
Interest cost: $60,000 = $600,000 X 10%
(b) 2015
Pension Expense ……………………………………………….. 155,360
Pension Asset/Liability …………………………………. 48,000
Other Comprehensive Income (PSC) …………….. 36,000
Other Comprehensive Income (G/L) ………………. 1,360
Cash ……………………………………………………………. 70,000
(c) Financial Statements—2015
Income Statement
Pension expense …………………………………………. $155,360
Comprehensive Income Statement
(a) PILLSBURY BOYS CORP.
Pension Worksheet—2015
General Journal Entries Memo Record
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
OCI—
Gain/Loss
Pension
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2015
160,000 Cr.
560,000 Cr.
400,000 Dr.
Service cost
43,000 Dr.
43,000 Cr.
Interest cost*
33,600 Dr.
33,600 Cr.
***
Year
1/1 Projected
Benefit
Obligation
Value of 1/1
Plan Assets
10%
Corridor
Accumulated
OCI (G/L), 1/1
Minimum
Amortization of
Loss for 2015
2015
$560,000
$400,000
$56,000
$65,000
*$1,125****
Actual return
34,000 Cr.
Unexpected gain**
14,000 Dr.
14,000 Cr.
Amortization of PSC
18,000 Dr.
Amortization of loss***
Contributions
41,000 Cr.
Benefits
15,000 Dr.
Journal entry for 2015
75,725 Dr.
41,000 Cr.
Accumulated OCI, Dec. 31, 2014
65,000 Dr.
Balance, Dec. 31, 2015
49,875 Dr.
161,600 Cr.
460,000 Dr.
PROBLEM 20-12B (Continued)
(b) 2015
Pension Expense …………………………………………….. 75,725
(c) Financial Statements—2015
Income Statement
Pension expense ………………………………………. $75,725
Comprehensive Income Statement
Net Income ……………………………………………………… $ XXXX
(a) JUNO JEWELS INC.
Postretirement Benefit Worksheet—2014
General Journal Entries
Memo Record
Items
Annual
Postretirement
Expense
Cash
OCI—Gain/
Loss
Postretirement
Asset/Liability
APBO
Plan Assets
Balance, Jan. 1, 2014
410,000 Cr.
530,000 Cr.
120,000 Dr.
Service cost
48,000 Dr.
48,000 Cr.
Interest cost*
42,400 Dr.
42,400 Cr.
(b) Journal Entry
Postretirement Expense …………………………………………. 80,400
Other Comprehensive Income (G/L) ………………………… 4,000
Postretirement Asset/Liability …………………………... 41,400
Cash ……………………………………………………………….. 43,000
Actual return
6,000 Cr.
Unexpected loss**
Contributions
Benefits
38,000 Dr.
Journal entry, for 2014
80,400 Dr.
Accumulated OCI, Dec. 31, 2013
Balance, Dec. 31, 2014
131,000 Dr.
*PROBLEM 20-14B
(a) See worksheet on next page.
(b) December 31, 2014
Postretirement Expense ……………………………….. 88,000
(c) See worksheet on next page. The entry is below.
December 31, 2015
Other Comprehensive Income (PSC) ……………… 356,000
(d) Financial Statements—2015
Income Statement
Postretirement expense …………………………. $151,860
General Journal Entries Memo Record
Annual
Expense
Cash
OCI—Prior
Service Cost
OCI—
Gain/Loss
Postretirement
Asset/Liability
APBO
Plan
Assets
Balance, Jan. 1, 2014
0
1,400,000 Cr.
1,400,000 Dr.
Service cost
60,000 Dr.
60,000 Cr.
Additional PSC, 1/1/2015
400,000 Dr.
400,000 Cr.
Balance, Jan. 1, 2015
1,916,000 Cr.
Service cost
66,000 Dr.
66,000 Cr.
Interest costc
114,960 Dr.
114,960 Cr.
Actual return
70,000 Cr.
70,000 Dr.
Unexpected lossd
3,100 Cr.
3,100 Dr.
Amortization of PSC
44,000 Dr.
44,000 Cr.
Contributions
62,000 Cr.
62,000 Dr.
Benefits
50,000 Dr.
50,000 Cr.
Journal entry for 2015
151,860 Dr.
62,000 Cr.
356,000 Dr.
448,960 Cr.
Accumulated OCI, Dec. 31, 2014
0
4,000 Cr.
Balance, Dec. 31, 2015
356,000 Dr.
502,960 Cr.
1,544,000 Dr.
*PROBLEM 20-14 (Continued)
Interest costa
84,000 Dr.
84,000 Cr.
Actual return
60,000 Cr.
60,000 Dr.
Unexpected gain
4,000 Dr.
4,000 Cr.
Contributions
30,000 Cr.
30,000 Dr.
Benefits
28,000 Dr.
28,000 Cr.
Journal entry for 2014
88,000 Dr.
30,000 Cr.
4,000 Cr.
Accumulated OCI, Dec. 31, 2013
Balance, Dec. 31, 2014
4,000 Cr.
1,516,000 Cr.
1,462,000 Dr.