Exercise 207 The following defined pension data of Shamrock

*Exercise 20-7 The following defined pension data of Shamrock Corp. apply to the year 2017. $562,000 548,700 13,300 Projected benefit obligation, 1/1/17 (before amendment) Plan assets, 1/1/17 Pension liability On January 1, 2017, Shamrock Corp., through plan amendment, grants prior service benefits having a present value of Settlement rate Service cost Contributions (funding) Actual (expected) return on plan assets Benefits paid to retirees 112,000 9 % 62,100 69,300 49,400 42,200 18,300 service cost amortization for 2017

Solution

SHAMROCK CORP. Pension Worksheet - 2017 General Journal Entries Memo Record Items Annual Pension Expense Cash OCI–Prior Service Cost Pension Asset/ Liability Projected Benefit Obligation Plan Assets Balance, Dec. 31, 2016      13,300 cr    562,000 cr    548,700 dr Prior service cost    112,000 dr    112,000 cr Balance, Jan. 1, 2017    674,000 cr    548,700 dr Service cost      62,100 dr      62,100 cr Interest cost - $674,000 X 9%      60,660 dr      60,660 cr Actual return      49,400 cr      49,400 dr Amortization of PSC      18,300 dr      18,300 cr Contributions      69,300 cr      69,300 dr Benefits      42,200 dr      42,200 cr Journal entry for 2017      91,660 dr      69,300 cr      93,700 dr    116,060 cr Accumulated OCI, Dec. 31, 2016 0 Balance, Dec. 31, 2017      93,700 dr    129,360 cr    754,560 cr    625,200 dr