Exercise 20-7 The following defined pension data of Rydell Corp. apply to the ye

Question

Exercise 20-7

The following defined pension data of Rydell Corp. apply to the year 2014.

For 2014, prepare a pension worksheet for Rydell Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

RYDELL CORP.
Pension Worksheet—2014

General Journal Entries

Memo Record

Annual Pension
Expense

Cash

OCI–Prior
Service Cost

Pension
Asset/
Liability

Projected Benefit
Obligation

Plan
Assets

Projected benefit obligation, 1/1/14 (before amendment) $568,600 Plan assets, 1/1/14 552,700 Pension liability 15,900 On January 1, 2014, Rydell Corp., through plan amendment,
   grants prior service benefits having a present value of 124,900 Settlement rate 9 % Service cost 67,700 Contributions (funding) 70,600 Actual (expected) return on plan assets 54,500 Benefits paid to retirees 46,200 Prior service cost amortization for 2014 21,000

Explanation / Answer

General Journal Entries Memo Record Annual Pension Expense Cash OCI- Prior Service Cost Pension Asset / Liability Projected Benefit Obligation Plan Assets Dec. 31, 2013 (15900) (568600) 552700 Prior Service Costs 124900 (124900) Adj. Bal. 1/1/2014 (693500) 552700 Service Cost 67700 (67700) Interest Cost 62415 (62415) Actual return (54500) 54500 Amort. of PSC 21000 (21000) Contributions (70600) 70600 Benefits Paid 46200 (46200) Journal Entry for 2014 96615 (70600) 103900 (129915) AOCI 12/31/2013 Dec. 31, 2014 103900 (145815) (777415) 631600

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