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CHAPTER 20

Accounting for Pensions and Postretirement Benefits

SOLUTIONS TO BRIEF EXERCISES

BRIEF EXERCISE 20-1
Service cost $ 333,000,000
Interest on PBO 712,000,000
Return on plan assets (566,000,000)
Amortization of prior service cost 13,000,000
Amortization of net loss 145,000,000
Pension expense $ 637,000,000

BRIEF EXERCISE 20-2
Ending plan assets $ 2,000,000
Beginning plan assets 1,780,000
Increase in plan assets 220,000
Deduct: Contributions $120,000 Less: Benefits paid 200,000 (80,000)
Actual return on plan assets $ 300,000

BRIEF EXERCISE 20-3
BEATY COMPANY

| |General Journal Entries |Memo Record |
| | | | |Projected Benefit | |
| |Pension Expense | |Pension |Obligation |Plan Assets |
|Items | |Cash |Asset /Liability | | |
|1/1/12 | | | |280,000 Cr. |280,000 Dr. |
|Service cost |27,500 Dr. | | |27,500 Cr. | |
|Interest cost |28,000 Dr. | | |28,000 Cr. | |
|Actual return* |25,000 Cr. | | | |25,000 Dr. |
|Contributions

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