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On December 31, 2013, Robey Company accumulated the following information for 2013 in regard to its defined benefit pension plan: Service cost $108,000 Interest cost on projected benefit obligation 15,000 Expected return on plan assets 11,000 Amortization of prior service cost 3,000 On its December 31, 2012, balance sheet, Robey had reported an accrued/prepaid pension cost liability of $11,000
On December 31, 2013, Robey Company accumulated the following information for 2013 in regard to its defined benefit pension plan:
| Service cost | $108,000 |
| Interest cost on projected benefit obligation | 15,000 |
| Expected return on plan assets | 11,000 |
| Amortization of prior service cost | 3,000 |
On its December 31, 2012, balance sheet, Robey had reported an accrued/prepaid pension cost liability of $11,000.
Prepare all the journal entries related to Robey's pension plan for 2013 if it funds the pension plan in the amount of $116,000. For compound entries, if an amount box does not require an entry, leave it blank.
Record Expense: Pension Expense (Debit), Cash (Credit), and Accrued/Prepaid Pension Cost (Credit)
Record PSC: Accrued/Prepaid Pension Cost (Debit), and Other Comprehensive Income: Prior Service Cost (Credit)
Expert Solution
Begin this problem by calculating the 2013 Pension expense for Robey Company. Given the information in the problem the pension expense calculation would look like this:
| Service Cost | $108,000.00 |
| Interest Cost | $15,000.00 |
| Expected Return | $(11,000.00) |
| Amortization of Prior Service Cost | $3,000.00 |
| Gain or loss | |
| Pension Expense | $115,000.00 |
Now that we have the pension expense for the year we would be able to create the year end journal entries for Robey Company. The journal entries for the company would be:
| Date | ||||
|---|---|---|---|---|
| Dec 31 2013 | Pension Expense | $115,000 | ||
| Accrued/Prepaid Pension Cost | $1,000 | |||
| Cash | $116,000 | |||
| Dec 31 2013 | Accrued/Prepaid Pension Cost | $3,000.00 | ||
| Other Comprehensive Income: Prior service cost | $3,000.00 |
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