Brief Exercise 20-3 At January 1, 2017, Novak Company had plan assets of $300,40

Question

Brief Exercise 20-3 At January 1, 2017, Novak Company had plan assets of $300,400 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 25,900, contributions were s20, 100, and benefits paid were $17,800 Prepare a pension worksheet for Novak Company for 2017 NOVAK COMPANY Projected Benefit Pension Expense Pension Asset/Liability Plan Assets Items Cash obligation Service cost Interest cost Actual return Contributions Benefits Journal entry, 1 Balance, 12/31/17 12/31/17

Explanation / Answer

Pension Worksheet for Novak Company for 2017 (Amts in $)

* Net Pension Liability on 12/31/17 = Projected Benefit Obligations - Plan Assets

= $375,740 - $364,200 = $11,540

General Journal Entries Memo Record Items Pension Expense Cash Pension Asset/Liability Projected Benefit obligation Plan Assets 1/1/17 300,400 Cr. 300,400 Dr. Service Cost 27,500 Dr. 27,500 Cr. Interest Cost 30,040 Dr. 30,040 Cr. Actual Return 25,900 Cr. 25,900 Dr. Contributions 20,100 Cr. 20,100 Dr. Benefits 17,800 Cr. 17,800 Dr. Journal Entry, 12/31/17 31,640 Dr. 20,100 Cr. 11,540 (31,640-20,100) Cr. Balance, 12/31/17 *11,540 Cr. 375,740 Cr. 364,200 Dr.

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