Question

At January 1, 2017, Hennein Company had plan assets of $280,000 and a projected benefit obligation of the same amount. During 2017, service cost was $27,500, the settlement rate was 10%, actual and expected return on plan assets were $25,000, contributions were $20,000, and benefits paid were $17,500. Prepare a pension worksheet for Hennein Company for 2017.

Answer 1

The Pension schedule is prepared in the workings as requested.

Step-by-step explanation:

The question is to Prepare a Pension Worksheet for Hennein Company for 2017

HENNEIN COMPANY

PENSION WORKSHEET FOR 2017

General Journal Entry Memo Record

Item Pension Cash Pension Defined Plan

Expenses Asset/Liab Benefit Assets

Obligation

Jan 1, 2017 280,000 CR 280,000 Dr

Service Cost 27,500 DR 27,500 CR

interest Cost 28,000 DR 28,000 CR

Actual return 25,000 CR 25,000 DR

Contributions 20,000 CR 20,000 DR

Benefits 17,500 DR 17,500 CR

Journal Entry 30,500 DR 20,000 CR 10,500 CR

Dec. 31, 2017 10,500 CR 318,000 CR 307,500 DR

Note that the interest cost is as follows

280,000 x 10% = $28,000