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Copyright 2013 John Wiley & Sons, Inc.

(a)

Items

LEMKE COMPANY
Pension Worksheet2014 and 2015
General Journal Entries
Annual
OCIPrior
Pension
Service
OCI
Expense
Cash
Cost
Gain/Loss

(For Instructor Use

Accumulated OCI, Dec. 31, 2014


Balance, Dec. 31, 2015

160,000 Cr.

600,000 Cr. 440,000 Dr.


72,000 Cr.
48,000 Cr.
60,000 Dr.

24,800 Cr.
80,000 Cr.

143,000 Dr.
80,000 Cr. 118,200 Dr. 116,000 Cr.
0
400,000 Dr.
320,000 Dr. 118,200 Dr. 276,000 Cr.

59,000 Dr.
143,000 Cr.

804,000 Cr.
95,000 Cr.
64,320 Cr.

87,000 Dr.
59,000 Cr.

528,000 Dr.

54,000 Dr.
11,760 Cr.
125,000 Cr.
3,100 Cr.
102,000 Dr.
63,000 Dr. 63,000 Cr.
125,000 Cr.

14,860 Cr.

3,320 Cr.

320,000 Dr. 118,200 Dr.


195,000 Dr. 103,340 Dr. 279,320 Cr.

900,320 Cr.

621,000 Dr.

PROBLEM 20-8B

Kieso, Intermediate Accounting, 15/e, Solutions to B Problems

Balance, Jan. 1, 2014


Service cost
72,000 Dr.
Interest cost(a)
48,000 Dr.
Actual return
60,000 Cr.
Unexpected gain(b)
24,800 Dr.
Amortization of PSC
80,000 Dr.
Contributions
87,000 Cr.
Benefits
Increase in PBO
Journal entry for 2014
164,800 Dr. 87,000 Cr.
Accumulated OCI, Dec. 31, 2013
Balance, Dec. 31, 2014
Service cost
95,000 Dr.
(c)
Interest cost
64,320 Dr.
Actual return
54,000 Cr.
(d)
Unexpected gain
11,760 Dr.
Amortization of PSC
125,000 Dr.
Amortization of loss(e)
3,100 Dr.
Contributions
102,000 Cr.
Benefits
Journal entry for 2015
245,180 Dr. 102,000 Cr.

Pension
Asset/
Liability

Memo Record
Projected
Benefit
Obligation Plan Assets

PROBLEM 20-8B (Continued)


Worksheet computations:
(a)

$48,000 = $600,000 X 8%.

(b)

$24,800 = ($440,000 X 8%) $60,000; actual return exceeds expected return.

(c)

$64,320 = $804,000 X 8%.

(d)
(e)

$11,760 = ($528,000 X 8%) $54,000; actual return exceeds expected return.

2015 Corridor Test:


Accumulated net (gain) or loss at beginning of year .................
10% of larger of PBO or fair value of plan assets.......................
Amortizable amount ......................................................................

$118,200
(80,400)
$ 37,800

2015 amortization ($37,800 12 years)........................................

$ 3,100

(b)

2014
Pension Expense .......................................................
Other Comprehensive Income (G/L) ........................
Cash ....................................................................
Pension Asset /Liability .....................................
Other Comprehensive Income (PSC) ...............
2015
Pension Expense .......................................................
Pension Asset /Liability .....................................
Cash ....................................................................
Other Comprehensive Income (PSC) ...............
Other Comprehensive Income (G/L) .................

Copyright 2013 John Wiley & Sons, Inc.

164,800
118,200
87,000
116,000
80,000
245,180

Kieso, Intermediate Accounting, 15/e, Solutions to B Problems

3,320
102,000
125,000
14,860

(For Instructor Use Only)20-19

PROBLEM 20-8B (Continued)


(c) Financial Statements2015
Income Statement
Pension expense .............................................

$245,180

Comprehensive Income Statement


Net Income ..............................................................
Other comprehensive income (loss)
Asset gain (loss) .............................................
Amortization of loss .......................................
Prior Service cost amortization .....................
Comprehensive income

$ XXXX
$ 11,760
3,100
125,000

Balance Sheet
Liabilities
Pension liability ........................................
Stockholders equity
Accumulated other comprehensive
loss (PSC) .............................................
Accumulated other comprehensive
loss (G/L) ..............................................

20-20Copyright 2013 John Wiley & Sons, Inc.

Kieso, Intermediate Accounting, 15/e, Solutions to B Problems

139,860
$ XXXX

$279,320

$ 195,000
103,340

(For Instructor Use Only)