Exercise 20-23 Pronghorn Co. provides the following information about its postre
ID: 2438472 • Letter: E
Question
Exercise 20-23
Pronghorn Co. provides the following information about its postretirement benefit plan for the year 2017.
Service cost
$89,900
Prior service cost amortization
3,100
Contribution to the plan
51,500
Actual and expected return on plan assets
57,900
Benefits paid
43,400
Plan assets at January 1, 2017
714,600
Accumulated postretirement benefit obligation at January 1, 2017
750,400
Accumulated OCI (PSC) at January 1, 2017
102,300
Dr.
Discount rate
9
%
Prepare a worksheet inserting January 1, 2017, balances, showing December 31, 2017, balances, and the journal entry recording postretirement benefit expense. (Enter all amounts as positive.)
PRONGHORN CO.
Postretirement Benefit Worksheet—2017
General Journal Entries
Memo Record
Items
Annual Postretirement
Expense
Cash
OCI—Prior
Service Cost
Postretirement Asset/
Liability
APBO
Plan Assets
Balance, Jan. 1, 2017
$
Dr.Cr.
$
Dr.Cr.
$
Dr.Cr.
$
Dr.Cr.
$
Dr.Cr.
$
Dr.Cr.
Service cost
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Interest cost
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Actual return
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Contributions
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Benefits
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Amortization of PSC
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Journal entry for 2017
$
Dr.Cr.
$
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Accumulated OCI, Dec. 31, 2016
Dr.Cr.
Dr.Cr.
Dr.Cr.
Dr.Cr.
Balance, Dec. 31, 2017
$
Dr.Cr.
$
Dr.Cr.
$
Dr.Cr.
$
Dr.Cr.
Service cost
$89,900
Prior service cost amortization
3,100
Contribution to the plan
51,500
Actual and expected return on plan assets
57,900
Benefits paid
43,400
Plan assets at January 1, 2017
714,600
Accumulated postretirement benefit obligation at January 1, 2017
750,400
Accumulated OCI (PSC) at January 1, 2017
102,300
Dr.
Discount rate
9
%
Explanation / Answer
Pronghorn Co. Postretirement Benefit Worksheet—2017 General Journal Entries Memo Record Items Annual Postretirement Cash OCI—Prior Postretirement Asset/ APBO Plan Assets Expense Service Cost Liability Balance, Jan. 1, 2017 $ $ $ 35800 Cr. 750400 Cr. 714600 Dr. Service cost 89900 Dr. 89900 Cr. Interest cost 67536 Dr. 67536 Cr. Actual return 57900 Cr. 57900 Dr. Contributions 51500 Cr 51500 Dr. Benefits 43400 Dr. 43400 Cr. Amortization of PSC 3100 Dr. 3100 Cr. Journal entry for 2017 102636 Dr. 51500 Cr. 3100 Cr. 48036 Cr. Accumulated OCI, Dec. 31, 2016 102300 Dr. Balance, Dec. 31, 2017 99200 Dr. 83836 Cr. 864436 Cr. 780600 Dr. Service Cost 89900 Interest on Accumu lated Posstretirement Benfit Obligation (9%* $750400) 67536 Expected Return on Plan Asset -57900 Amortisation of Prior Service Cost 3100 Post Retirement Expense 102636
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