Intel Corp. provides the following information about its defined benefit pension
ID: 2473763 • Letter: I
Question
Intel Corp. provides the following information about its defined benefit pension plan for the year 2014:
Service Cost $180,000
Contribution to the plan $210,000
Actual and expected return on plan assets $128,000
Prior service cost amortization $20,000
Benefits paid to retirees $80,000
Plan assets at 1/1/2014 $1,280,000
Projected benefit obligation at 1/1/2014 $1,400,000
Accumulated OCI (PSC) at 1/1/2014 $300,000
Interest/discount (settlement) rate 10%
Prepare a pension worksheet inserting 1/1/2014, balances, showing December 31, 2014, and the journal entry recording expense.
Explanation / Answer
Intel Corp. Service cost 180000 Contribution to the plan 210000 Actual & Expected return on plan assets 128000 Prior service cost amortization 20000 Benefit paid to retirees 80000 Plan Assets at 1/1/2014 1280000 Projected benefit obligation at 1/1/2014 1400000 Accumulated OCI PSC at 1/1/2014 300000 Interest /discount (Settlement ) rate 10% 10% General Journal Entries Memo Recods Item Pension Expense Cash PSC Gain/Loss Pension Assets/Liability Projected benefit obligation Plan Assets Jan,1 2010 $ 300,000.00 $ (180,000.00) $(1,400,000.00) $ 1,280,000.00 Service Cost $ 180,000.00 $ (180,000.00) Interest Cost $ 128,000.00 $ (128,000.00) Actual Return $ (128,000.00) $ 128,000.00 Contributions $ (210,000.00) $ 210,000.00 Benefit Paid $ 80,000.00 $ (80,000.00) Prior service cost amortization $ 20,000.00 $ (20,000.00) Journal Entry Dec 31,2010 $ 200,000.00 $ (210,000.00) $ 280,000.00 $ (180,000.00) $ (90,000.00) $(1,628,000.00) $ 1,538,000.00 Journal Entry Recording Expense Particular Amount(DR) Amount (CR) Pension Expense $ 200,000.00 OCI-PSC $ 280,000.00 Pension Liability $ 90,000.00 Cash $ 210,000.00 Gain/oss $ 180,000.00
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