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Using the information in E20-22, prepare a worksheet inserting January 1, 2017, balances, showing December 31, 2017, balances, and the journal entry recording postretirement benefit expense

Short Answer

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Retirement can be classified into two categories, i.e.,voluntary and non-voluntary retirement. All of the service employeesare eligible for retirement.

Step by step solution

01

Pension worksheet at January 1, 2017

Englehart Co
Postretirement benefit worksheet
General journal entries
Memo record

Particulars

Annual postretirement expense

Cash

OCI-Prior service cost

Postretirement asset/liability

Annual projected benefit obligation

Plan assets

Balance Jan 1, 2017

$50,000 Cr.

$760,000 Cr.

$710,000 Dr.

Service cost

$90,000 Dr.

$90,000 Cr.

Interest cost

$760,000ร—9%

$68,400 Dr.

$68,400 Cr.

Actual return

$62,000 Cr.

$62,000 Dr

Contributions

$56,000 Cr.

$56,000 Dr.

Benefits

$40,000 Dr.

$40,000 Cr.

Amortization of PSC

$3,000 Dr.

$3,000 Cr.

Journal entry for 2017

$99,400 Dr.

$56,000 Cr.

$3,000 Cr.

$40,400 Cr.

Accumulated OCI 2016

$100,000 Dr.

Balance Dec 31, 2017

$97,000 Dr.

$90,400 Cr.

$878,400 Cr.

$788,000 Dr.

02

Journal entry to record the postretirement benefit expense for the year 2017.

Englehart Co
Journal Entry

Date

Particulars

Debit

Credit

2017

Postretirement expense

$99,400

Postretirement asset/liability

$40,400

Cash

$56,000

Prior service cost-OCI

$3,000

(To record the postretirement expense)


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Most popular questions from this chapter

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