https//edugen wileyplus t/mainfr.un ractice Assignnment Gradebook ORION Download
ID: 341740 • Letter: H
Question
https//edugen wileyplus t/mainfr.un ractice Assignnment Gradebook ORION Downloadable eTextbook gnment FULL 50 REEN Exercise 19-2 Sheridan Ltd. provides a defined contribution pension plan for its employees. Ourrenitly, the company has 55 full-time and 62 part time employees. The pension plan requires the company to make an annual contribution of $2,700 per full-time employee, and $1,250 per part-time employee, regardless of their annual salary. In addition, employees can matdh the employer's contribution in any gliven year at the beginning of the year, 20 fuli-time and 31 part-time employees elected to contribute to their pension plan by matching the company's contribution. An equal amount of funds was withheld from the employees' cheques in order to fund their pension contribution. Both the emplovees and employer's contributions are sent to the plan trustee at year end. what amount of annual pension expense will the company report? Pension expense to be reported LIST OF ACCOUNTS LINK TO TEXT Prepare a summary journal entry to record Sheridan Ltd.s payment to the plan trustee. (Credit account titles are automatically indented when the amount is antered. Do not indent manually.) Debit Credit Account Titles and ExplanationExplanation / Answer
Answer: Premium expense to be reported will be calculated as follows :
Premium for full time employees = 55 employees * $2,700 per employee = $148,000
Premium for part time employees = 62 employees * $1,250 per employee = $77,500
Hence total premium = $148,000 + $77,500 = $225,500
Journal Entries :
Employers Contribution A/c. Dr. $225,500
Employees Contribution A/c. Dr. $92,750 (20*2700 +31* 1250)
To Pension Fund Trust A/c. $318,250
(Being expenses recorded with respect to employer contribution and transferring the amount collected from employees to pension fund account )
Pension fund trust A/c. Dr. $318,250
To Bank A/c. $318,250
(Being amount paid towarda employer and employee contribution to pension fund)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.