Problem 20-7 Sheridan Corp. sponsors a defined benefit pension plan for its empl

Question

Problem 20-7 Sheridan Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balancesr Plan assets (market-related value) Projected benefit obligation Pension asset/liability Prior service cost Net gain or loss (debit) $525,000 695,000 170,000 Cr 74,000 91,000 actuary provided the following additional data for 2017. As a result of the operation of the plan during 2017, t Service cost for 2017 Settlement rate, 9%; expected return rate, 10% 104,000 49,000 23,000 129,000 77,000 Actual return on plan assets in 2017 Amortization of prior service cost Contributions in 2017 Benefits paid retirees in 2017 Average remaining service life of active employees 10 years Using the preceding data, compute pension expense for Sheridan Corp. for the year 2017 by preparing a pension workshee amounts as positive.) SHERIDAN CORP Pension Worksheet-2017 Annual Pension ocI-Prior OCI Gain/

Explanation / Answer

SHERIDAN CORP. Pension Worksheet—2017            General Journal Entries                                             Memo Record Annual OCI—Prior Projected Pension Service Cost OCI— Pension Benefit Plan Items Expense Cash Gain/Loss Asset/Liability Obligation Assets Balance, Jan. 1, 2017 170,000 Cr. 695,000 Cr. 525,000 Dr. Service cost 104,000 Dr. 104,000 Cr. Interest cost* 62,550 Dr. 62,550 Cr. Actual return 49,000 Cr. 49,000 Dr. Unexpected loss** 3,500 Cr. 3,500 Dr. Amortization of PSC 23,000 Dr. 23,000 Cr. Amortization of loss*** 2,150 Dr. 2,150 Cr. Contributions 129,000 Cr. 129,000 Dr. Benefits                                                                 77,000 Dr. 77,000 Cr. Journal entry for 2017 139,200 Dr. 129,000 Cr. 23,000 Cr. 1,350 Dr. 11,450 Dr. Accumulated OCI, Dec. 31, 2016 74,000 Dr. 91,000 Dr.                                         Balance, Dec. 31, 2017 51,000 Dr. 92,350 Dr. 158,550 Cr. 784,550 Cr. 626,000 Dr. *$62,550 = $695,000 X .09. **$3,500 = ($525,000 X .10) – $49,000. *** 1/1 Projected Minimum     Benefit Value of 1/1 10% Accumulated Amortization of Year Obligation Plan Assets Corridor OCI (G/L), 1/1 Loss for 2017 2017 $695,000 $525,000 $69,500 $91,000 *$2,150**** ****$91,000 – $69,500 = $21,500; $21,500 ÷ 10 = $2,150.

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