Refer
to the information in E19–18.
In
E Rebek Corporation provides the following information about its defined
benefit pension plan for the year 2011:
Service
cost …………………………………………………………… $ 225,000
Contribution
to the plan ………………………………………………. 262,500
Past
service cost amortization …………………………………………. 25,000
Actual
and expected return on plan assets …………………………… 160,000
Benefits
paid ………………………………………………………… 100,000
Accrued
pension liability at Jan. 1, 2011 …………………………… 25,000
Plan
assets at Jan. 1, 2011 …………………………………………….
1,600,000
Accrued
benefit obligation at Jan. 1, 2011 …………………………… 2,000,000
Unrecognized
past service cost balance at Jan. 1, 2011 ………………. 375,000
Settlement
rate ……………………………………………………….. 10%
Instructions
(a)
Prepare a pension work sheet: insert the January 1, 2011 balances and show the
December 31, 2011 balances.
(b)
Prepare all journal entries.
(a)
Rebek Corporation
Pension Work Sheet—2011
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General Journal Entries
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Memo Record
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Annual
Pension
Expense
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Cash
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Accrued
Pension
Liability
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Accrued
Benefit
Obligation
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Plan
Assets
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Unrecognized
Past
Service Cost
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Balance,
01/01/2011
(a) Service cost
(b) Interest cost
(c) Actual return
(d) Amortization
of PSC
(e) Contributions
(f) Benefits paid
Journal
entry
Balance,
01/31/2011
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225,000 Dr.
200,000 Dr.
160,000 Cr.
25,000 Dr.
000,000 Dr.
290,000 Dr.
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262,500 Cr.
000,000 Dr.
262,500 Cr.
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25,000 Cr.
27,500 Cr.
52,500 Cr.
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2,000,000 Cr.
225,000 Cr.
200,000 Cr.
100,000 Dr.
000,000 Dr.
2,325,000
Cr.
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1,600,000 Dr.
160,000 Dr.
262,500 Dr.
100,000 Cr.
000,000 Dr.
1,922,500
Dr.
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375,000 Dr.
25,000 Cr.
000,000 Dr.
350,000 Dr.
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(b) $200,000 = $2,000,000 X 10%.
Reconciliation Schedule
Accrued benefit obligation $(2,325,000 )
Plan assets at fair value 1,922,500
Funded status (402,500 )
Unrecognized past service cost 350,000
Accrued pension liability $ (52,500)
