Finance HW: Refer to the information in E19–18. In E Rebek Corporation provides the following information about its defined benefit pension plan for the year 2011:

Thursday, July 28, 2016

Refer to the information in E19–18.

In E Rebek Corporation provides the following information about its defined benefit pension plan for the year 2011:

Service cost …………………………………………………………… $ 225,000

Contribution to the plan ………………………………………………. 262,500

Past service cost amortization …………………………………………. 25,000

Actual and expected return on plan assets …………………………… 160,000

Benefits paid ………………………………………………………… 100,000

Accrued pension liability at Jan. 1, 2011 …………………………… 25,000

Plan assets at Jan. 1, 2011 ……………………………………………. 1,600,000

Accrued benefit obligation at Jan. 1, 2011 …………………………… 2,000,000

Unrecognized past service cost balance at Jan. 1, 2011 ………………. 375,000

Settlement rate ……………………………………………………….. 10%

Instructions

(a) Prepare a pension work sheet: insert the January 1, 2011 balances and show the December 31, 2011 balances.

(b) Prepare all journal entries.

(a)

Rebek Corporation

Pension Work Sheet—2011

	General Journal Entries			Memo Record

	Annual Pension Expense	Cash	Accrued Pension Liability	Accrued Benefit Obligation	Plan Assets	Unrecognized Past Service Cost

Balance, 01/01/2011 (a) Service cost (b) Interest cost (c) Actual return (d) Amortization of PSC (e) Contributions (f) Benefits paid Journal entry Balance, 01/31/2011	225,000 Dr. 200,000 Dr. 160,000 Cr. 25,000 Dr. 000,000 Dr. 290,000 Dr.	262,500 Cr. 000,000 Dr. 262,500 Cr.	25,000 Cr. 27,500 Cr. 52,500 Cr.	2,000,000 Cr. 225,000 Cr. 200,000 Cr. 100,000 Dr. 000,000 Dr. 2,325,000 Cr.	1,600,000 Dr. 160,000 Dr. 262,500 Dr. 100,000 Cr. 000,000 Dr. 1,922,500 Dr.	375,000 Dr. 25,000 Cr. 000,000 Dr. 350,000 Dr.

(b) $200,000 = $2,000,000 X 10%.

Accrued benefit obligation $(2,325,000 )

Plan assets at fair value 1,922,500

Funded status (402,500 )

Unrecognized past service cost 350,000

Accrued pension liability $ (52,500)

Finance HW