13. Preparing a pension work sheet. Iee accountant for Marlin Corporation has de
ID: 2509104 • Letter: 1
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13. Preparing a pension work sheet. Iee accountant for Marlin Corporation has developed the following information for the company's defined-benefit pension plan for 2018 Service cost Actual return on plan assets Annual contribution to the plan Amortization of prior service cost Benefits paid to retirees Settlement rate Expected rate of return on plan assets $1,000,000 500,000 1,840,000 250,000 120,000 10% 890 The accumulated benefit obligation at December 31, 2018, amounted to $6,500,000. Instructions (a) Using the above information for Marlin Corporation, complete the pension work Indicate (credit) entries by parentheses. Calculated amounts should be supported. (b) Prepare the journal entry to reflect the accounting for the company's pension plan for the year ending December 31, 2018.Explanation / Answer
Annual pension expense Cash OCI Pension Asset/Liability Projected benefit obligation Plan assets Prior service cost 6,500,000.00 0 (6,500,000.00) 0 6,500,000.00 0 (6,500,000.00) 0 Amortize prior service cost 250,000.00 (250,000.00) 0 0 Annual service cost 1,000,000.00 (1,000,000.00) 0 Actual return (500,000.00) - 500,000.00 Contribution (1,840,000.00) - 1,840,000.00 Beefits paid 120,000.00 (120,000.00) Interest cost 650,000.00 (650,000.00) Ending pension/liability (5,810,000.00) 1,400,000.00 (1,840,000.00) 6,250,000.00 (5,810,000.00) (14,530,000.00) 2,220,000.00 Pension expense 1400000 OCI 6250000 CASH 1840000 Pension liability 5810000
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