Reference no: EM131109431
1. (Computation of Pension Expense, Amortization of Net Gain or Loss-Corridor Approach, Journal Entries for 3 Years) Hiatt Toothpaste Company initiates a defined-benefit pension plan for its 50 employees on January 1, 2010. The insurance company which administers the pension plan provided the following selected information for the years 2010, 2011, and 2012. There were no balances as of January 1, 2010, when the plan was initiated. The actual and expected return on plan assets was 10% over the 3-year period but the settlement rate used to discount the company's pension obligation was 13% in 2010, 11% in 2011, and 8% in 2012. The service cost component of net periodic pension expense amounted to the following: 2010, $60,000; 2011, $85,000; and 2012, $119,000. The average remaining service life per employee is 12 years. No benefits were paid in 2010, $30,000 of benefits were paid in 2011, and $18,500 of benefits were paid in 2012 (all benefits paid at end of year)
(Round to the nearest dollar)
(a) Calculate the amount of net periodic pension expense that the company would recognize in 2010, 2011, and 2012.
(b) Prepare the journal entries to record net periodic pension expense, employer's funding contribution, and related pension amounts for the years 2010, 2011, and 2012.
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Prepare a pension worksheet presenting both years
: Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.
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Average remaining service life of active employees
: Hanson Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2010, the following balances related to this plan.
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What is the total dollar amount of accounts receivable
: If the bank will accept all accounts that can be collected in 45 days or less as long as the customer has a history of paying within 45 days, which accounts will be acceptable? What is the total dollar amount of accounts receivable collateral?
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Compute the amount of the 2010 increase or decrease
: Compute the amount of the 2010 increase/decrease in net gains or losses and the amount to be amortized in 2010 and 2011.
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Prepare the journal entries to record net periodic pension
: Prepare the journal entries to record net periodic pension expense, employer's funding contribution, and related pension amounts for the years 2010, 2011, and 2012.
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Prepare the journal entries to record the pension expense
: Prepare the journal entries to record the pension expense and the company's funding of the pension plan for both years.
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Indicate the pension amounts reported in the financial state
: Compute the amount of the 2010 increase/decrease in gains or losses and the amount to be amortized in 2010 and 2011.
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Jackson company adopts acceptable accounting
: Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.
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Cunningham company has the following defined benefit
: The interest (settlement) rate applicable to the plan is 10%. On January 1, 2011, the company amends its pension agreement so that prior service costs of $500,000 are created. Other data related to the pension plan are as follows.
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