What will be the pension expenditures to be reported in each of the following situations. I have the journal entries but am not sure they are what this question is looking for. In reading the question it sounds as if a dollar amount may need to be reported for Pension Expenditure, under each of the four scenarios. If so I will put list what I believe each answer will be if someone could please advise. Thanks so very much.
(Pension Entries) Assume that the actuarially required pension plan contribution for a county for its general government employees is $8,000,000. Compute the pension expenditures to be reported in each of the following situations:
1. The county contributed $5,000,000 to the pension plan. Its unfunded pension liability increased by $3,000,000 (all classified as unmatured).
2. The county contributed $4,500,000 to the pension plan. Its unfunded pension liability increased by $3,500,000 (all classified as unmatured).
3. The county contributed $4,200,000 to the pension plan. The matured portion of its unfunded pension liability increased $150,000.
4. The county contributed $9,000,000 to the pension plan. The matured portion of its unfunded pension liability decreased $200,000.
My thoughts on #1 is that expenditure would be $5,000,000 given that the increase is classified as un-matured meaning its a long-term liability rather than a current liability to the fund.
My thoughts on #2 is that the expenditure would be reported as $4,500,000 given that the increase is classified as un-matured meaning its a long-term liability rather than a current liability to the fund.
My thoughts on #3 is that the expenditure would be reported as $4,350,000 given that the increase is classifed as matured, making it a current matter to the fund. Thus $4,200,000 + $150,000 = $4,350,000.
My thoughts on #4 is, the expedniture would be reported as $8,800,000 given that the decrease is classifed as matured, making it a current matter to the fund. This $9,000,000 - $200,000 = $8,800,000
An expert replied to this and stated that the question is not clear. I fully agree, unfortunately the question is posed exactly as the textbook authors posed it in the textbook of "Governmental And Nonprofit Accounting Theory And Practice." Online Schools use these garbage textbooks and the result of that is an substandard learning experience. Again though, to the expert who did comment, I fully agree that he question is rubbish as it is written.