E20-1
The following information is available for the pension plan of Radcliffe
Company for the year 2014.
|
Actual
and expected return on plan assets
|
|
$ 15,000
|
|
|
Benefits
paid to retirees
|
|
40,000
|
|
|
Contributions
(funding)
|
|
90,000
|
|
|
Interest/discount
rate
|
|
10
|
%
|
|
Prior
service cost amortization
|
|
8,000
|
|
|
Projected
benefit obligation, January 1, 2014
|
|
500,000
|
|
|
Service
cost
|
|
60,000
|
|
Compute
pension expense for the year 2014.
Pension
expense for 2014$
Prepare
the journal entry to record pension expense and the employer’s contribution to
the pension plan in 2014. (Credit account titles are automatically indented
when amount is entered. Do not indent manually.)
|
Account
Titles and Explanation
|
Debit
|
Credit
|
TUTORIAL PREVIEW
(a) Computation of pension expense:
Service cost
|
$ 60,000
|
Interest cost ($500,000 X .10)
|
50,000
|
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