Question

The following facts apply to the pension plan of Carla Inc. for the year 2020.

Plan assets, January 1, 2020 $470,900
Projected benefit obligation, January 1, 2020 470,900
Settlement rate 8 % Service cost 38,500
Contributions (funding) 24,300
Actual and expected return on plan assets 46,800
Benefits paid to retirees 34,700

Required:
Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts.

Answer 1

Carla Inc.

Pension Worksheet - 2020

General journal Entries Memo Record

Items Annual pension Cash Pension Projected Plan

expense Asset/liability benefit oblig. assets

Balance, Jan 1 470,900 470,900

Service cost 38,500 38,500

Interest cost 37,672 37,672

Actual return 46,800 46,800

Contributions 24,300 24,300

Benefits 34,700 34,700

Journal entry, 29,372 24,300 5072

Dec 31, 2020

Balance, Dec 31 5072 512,372 507,300

2020