Chapter 20 Solutions
E20-7
Rydell Corp Memo Record
Items
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
Pension
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2012
13,800 cr
560,000 cr
546,200 dr
Prior service cost
120,000 dr
120,000 cr
New Balance, January 1, 2012
680,000 cr
546,200 dr
Service cost
58,000 dr
58,000 cr
Interest Cost
$680,000 x 9% = $61,200
61,200 dr
61,200 cr
Actual return
52,280 cr
52,280 dr
Unexpected gain/ loss
Amortization of PSC
17,000 dr.
17,000 cr
Contributions
65,000 cr
65,000 dr
Benefits
40,000 dr
40,000 cr
Journal entry for 2012
83,920 dr
65,000 cr
103,000 dr
121,920 cr
Accumulated OCI, Jan. 1, 2012
-0-
Balance, Dec. 31, 2012
103,000 dr
135,720 cr
759,200 cr
623,480 dr
E20-7 Continued
Pension Expense 83,920
OCI (PSC) 103,000 Cash 65,000 Pension Asset/Liability 121,920
E20-10
Webb Corp. Memo Record
Items
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
OCI---
Gain/Loss
Pension
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2012
120,000 cr
600,000 cr
480,000 dr
Service cost
90,000 dr
90,000 cr
Interest Cost
$600,000 x 9% = $54,000
54,000 dr
54,000 cr
Actual return
55,000 cr
55,000 dr
Unexpected gain
$55,000 - $52,000 = $3,000
3,000 dr
3,000 cr
Amortization of PSC
19,000 dr
19,000 cr
Liability increase
76,000 dr
76,000 cr
Amortization of gain/loss
Contributions
99,000 cr
99,000 dr
Benefits
85,000 dr
85,000 cr
Journal entry for 2012
111,000 dr
99,000 cr
19,000 cr
73,000 dr
66,000 cr
Accumulated OCI, Jan. 1, 2012
100,000 dr
-0-
Balance, Dec. 31, 2012
81,000 dr
73,000 dr
186,000 cr
735,000 cr
549,000 dr
E20-10 Continued
Pension Expense 111,000
OCI (G/L) 73,000 OCI (PSC) 19,000 Cash 99,000 Pension
Rydell Corp Memo Record
Items
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
Pension
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2012
13,800 cr
560,000 cr
546,200 dr
Prior service cost
120,000 dr
120,000 cr
New Balance, January 1, 2012
680,000 cr
546,200 dr
Service cost
58,000 dr
58,000 cr
Interest Cost
$680,000 x 9% = $61,200
61,200 dr
61,200 cr
Actual return
52,280 cr
52,280 dr
Unexpected gain/ loss
Amortization of PSC
17,000 dr.
17,000 cr
Contributions
65,000 cr
65,000 dr
Benefits
40,000 dr
40,000 cr
Journal entry for 2012
83,920 dr
65,000 cr
103,000 dr
121,920 cr
Accumulated OCI, Jan. 1, 2012
-0-
Balance, Dec. 31, 2012
103,000 dr
135,720 cr
759,200 cr
623,480 dr
E20-7 Continued
Pension Expense 83,920
OCI (PSC) 103,000 Cash 65,000 Pension Asset/Liability 121,920
E20-10
Webb Corp. Memo Record
Items
Annual
Pension
Expense
Cash
OCI—Prior
Service
Cost
OCI---
Gain/Loss
Pension
Asset/Liability
Projected
Benefit
Obligation
Plan
Assets
Balance, Jan. 1, 2012
120,000 cr
600,000 cr
480,000 dr
Service cost
90,000 dr
90,000 cr
Interest Cost
$600,000 x 9% = $54,000
54,000 dr
54,000 cr
Actual return
55,000 cr
55,000 dr
Unexpected gain
$55,000 - $52,000 = $3,000
3,000 dr
3,000 cr
Amortization of PSC
19,000 dr
19,000 cr
Liability increase
76,000 dr
76,000 cr
Amortization of gain/loss
Contributions
99,000 cr
99,000 dr
Benefits
85,000 dr
85,000 cr
Journal entry for 2012
111,000 dr
99,000 cr
19,000 cr
73,000 dr
66,000 cr
Accumulated OCI, Jan. 1, 2012
100,000 dr
-0-
Balance, Dec. 31, 2012
81,000 dr
73,000 dr
186,000 cr
735,000 cr
549,000 dr
E20-10 Continued
Pension Expense 111,000
OCI (G/L) 73,000 OCI (PSC) 19,000 Cash 99,000 Pension