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Chapter 20: BE20-12 (page 1163)

For 2017, Sampsell Inc. computed its annual postretirement expense as \(240,900. Sampsell’s contribution to the plan during 2017 was \)180,000. Prepare Sampsell’s 2017 entry to record postretirement expense, assuming Sampsell has no OCI amounts.

Short Answer

Expert verified

Journal entryrefers to recording the organization’s financial transactionsin a summarized manner. Each transaction is recorded according to the accounting concepts.

Step by step solution

01

Given amounts:

Particulars

Amount

Postretirement expense

$240,900

Contribution

$180,000

02

Journal entry of Sampsell for 2017

Sampsell Inc
Journal Entry

Date

Particulars

Debit

Credit

2017

Postretirement Expense

$240,900

Cash

$180,000

Postretirement Asset/Liability

$60,900

(To record the postretirement expense)

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Most popular questions from this chapter

The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses. Incurred during the Year (Gain) or Loss 2017 \(300,000 2018 480,000 2019 (210,000) 2020 (290,000) Other information about the company’s pension obligation and plan assets is as follows. Projected Benefit Plan Assets As of January 1, Obligation (market-related asset value) 2017 \)4,000,000 $2,400,000 2018 4,520,000 2,200,000 2019 5,000,000 2,600,000 2020 4,240,000 3,040,000 Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total serviceyears for all participating employees is 5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2017. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

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