Question

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

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

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 $\left(\mathbf{\$}\mathbf{760}\mathbf{,}\mathbf{000}\mathbf{\times }\mathbf{9}\mathbf{\%}\right)$	$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.

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)