The account for Marlin Corporation has developed the following information for t
ID: 2574834 • Letter: T
Question
The account for Marlin Corporation has developed the following information for the company's defined-benefit pension plan for 2015:
Service cost $500,000
Actual return on plan assets 250,000
Annual contribution to the plan 920,000
Amortization of prior service cost 125,000
Benefits paid to retirees 60,000
Settlement rate 10%
Expected rate of retrun on plan assets 8%
The accumulated benefit obligation at December 31, 2015, amounted to $3,250,000. Tne accumulated OCI (PSC) at December 31, 2014 was $625,000.
Instructions
(a) Using the above information for Marlin Corporation, complete the pension work sheet for 2015. Indicate (credit) entries by parentheses. Calculated amount should be supported
(b) Prepare the journal entry to reflect the accounting for the company's pension plan for the year ending December 31, 2015.
Explanation / Answer
Marlin Corporation Pension Work Sheet—2015 General Journal Entries Memo Entries Annual Pension Expense Cash PSC Gain/Loss Pension Asset/Liability Projected Benfit Obligation Plan Assets Bal., Dec. 31, 2014 625000 -1250000 -4000000 2750000 Past Service Cost Service Cost 500000 -5000000 Interest Cost 400000 -500000 Annual Return -250000 250000 Unexpected gain /Loss 30000 -30000 Amortization of PSC 125000 -125000 Contributions -920000 920000 Benefits 60000 -60000 Journal entry for 2015 805000 -920000 -125000 -30000 270000 AOCI 12/31/14 625000 0 Bal., Dec. 31, 2015 500000 -30000 -980000 -9440000 2 Pension Expense 805000 Pension Asset/Liability 270000 Cash 920000 Other Comprehensive Income (PSC) 125000 Other Comprehensive Income (G/L) 30000
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