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2019 2020 Plan asset (fair value), Dec 31 2,796,000 3,396,000 Defined benefit obligation, Jan 1 2,800,000 3,292,000 Pension asset/ liability, Jan 1 560,000 (Cr) ? Service cost 240,000 360,000 Actual return on plan assets 96,000 120,000 Contributions 460,000 480,000 Accumulated benefit obligation, Dec 31 2,000,000 2,200,000 Discount (interest) rate 9% 9%

2019 2020 Plan asset (fair value), Dec 31 2,796,000 3,396,000 Defined benefit obligation, Jan 1 2,800,000 3,292,000 Pension asset/ liability, Jan 1 560,000 (Cr) ? Service cost 240,000 360,000 Actual return on plan assets 96,000 120,000 Contributions 460,000 480,000 Accumulated benefit obligation, Dec 31 2,000,000 2,200,000 Discount (interest) rate 9% 9%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information is related to White Co.’s pension plan:

Required:
a. Explain why White Co. has pension liability at the beginning and the end of the year!
b. Compute the pension expense for 2019 and 2020!
c. Prepare the journal entries for both years and explain the journal that you make!

2019 2020 Plan asset (fair value), Dec 31 2,796,000 3,396,000 Defined benefit obligation, Jan 1 2,800,000 3,292,000 Pension asset/ liability, Jan 1 560,000 (Cr) ? Service cost 240,000 360,000 Actual return on plan assets 96,000 120,000 Contributions 460,000 480,000 Accumulated benefit obligation, Dec 31 2,000,000 2,200,000 Discount (interest) rate 9% 9%
Transcribed Image Text:2019 2020 Plan asset (fair value), Dec 31 2,796,000 3,396,000 Defined benefit obligation, Jan 1 2,800,000 3,292,000 Pension asset/ liability, Jan 1 560,000 (Cr) ? Service cost 240,000 360,000 Actual return on plan assets 96,000 120,000 Contributions 460,000 480,000 Accumulated benefit obligation, Dec 31 2,000,000 2,200,000 Discount (interest) rate 9% 9%
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