Prepare the journal entry using the spreadsheet journal


Problem - Melanie Vail Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2015, the following balances relate to this plan.

Plan assets $480,000

Projected benefit obligation 625,000

Accumulated OCI (PSC)     100,000

As a result of the operation of the plan during 2015, the following additional data are provided by the actuary.

Service cost for 2015 $90,000

Settlement rate 9%

Actual return on plan assets in 2015 57,000

Amortization of prior service cost 19,000

Expected return on plan assets 52,000

Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 76,000

Contributions in 2015 99,000

Benefits paid retirees in 2015 85,000

1. Use the attached Excel spreadsheet to prepare a pension worksheet. On the pension worksheet, compute pension expense, pension asset/liability, projected benefit obligation, plan assets, prior service cost, and net gain or loss.

2. Compute the same items as in (#1), assuming that the settlement rate is now 7% and the expected rate of return is 10%.

3. Prepare the journal entry using the spreadsheet Journal Entries to record pension expense in 2015. You need to prepare journal entries for only #1 above.

4. Indicate the reporting of the 2015 pension amounts in the income statement and balance sheet using the spreadsheet Pensions. You need to show financial statements' presentations for only #1 above.

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Accounting Basics: Prepare the journal entry using the spreadsheet journal
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