The following facts apply to the pension plan of Carla Inc. for the year 2020. Plan assets, January 1, 2020 $470,900
Projected benefit obligation, January 1, 2020 470,900
Settlement rate 8 % Service cost 38,500
Contributions (funding) 24,300
Actual and expected return on plan assets 46,800
Benefits paid to retirees 34,700

Required:
Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts.

Solution:

                                                         Carla Inc.

                                           Pension Worksheet - 2020

                                    General journal Entries                       Memo Record

Items                   Annual pension   Cash    Pension           Projected      Plan

                                expense                    Asset/liability  benefit oblig.  assets

Balance, Jan 1                                                                     470,900    470,900

Service cost           38,500                                                 38,500

Interest cost           37,672                                                  37,672

Actual return          46,800                                                                    46,800

Contributions                              24,300                                               24,300

Benefits                                                                               34,700        34,700

Journal entry,        29,372          24,300     5072

Dec 31, 2020

Balance, Dec 31                                           5072             512,372        507,300

2020                        

c

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number