What amount of annual pension expense will company report

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Question - Sheridan Ltd. provides a defined contribution pension plan for its employees. Currently, the company has 58 full-time and 59 part-time employees. The pension plan requires the company to make an annual contribution of $4,600 per full-time employee, and $3,500 per part-time employee, regardless of their annual salary. In addition, employees can match the employer's contribution in any given year.

At the beginning of the year, 25 full-time and 29 part-time employees elected to contribute to their pension plan by matching the company's contribution. An equal amount of funds was withheld from the employees' cheques in order to fund their pension contribution. Both the employees' and employer's contributions are sent to the plan trustee at year end.

What amount of annual pension expense will the company report?

Prepare a summary journal entry to record Sheridan Ltd.'s payment to the plan trustee. Assume no accruals have been recorded for the employer portion and use the account Pension Contributions Payable.

Reference no: EM133035447

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