Amherst City provides a defined benefit pension plan for employees of the city electric utility, an enterprise fund. Assume that the projected level of earnings on plan investments is $190,000, the service cost component is $250,000, and interest on the pension liability is $160,000 for the year. Actual returns on plan assets for the year were $175,000, and the City is amortizing a deferred outflow resulting from a change in plan assumptions from a prior year in the amount of $6,000 per year.

Prepare journal entries to record annual pension expense for the enterprise fund.

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Business

Ashlynn Morrison

5 December, 14:03

Amherst City provides a defined benefit pension plan for employees of the city electric utility, an enterprise fund. Assume that the projected level of earnings on plan investments is $190,000, the service cost component is $250,000, and interest on the pension liability is $160,000 for the year. Actual returns on plan assets for the year were $175,000, and the City is amortizing a deferred outflow resulting from a change in plan assumptions from a prior year in the amount of $6,000 per year.

Prepare journal entries to record annual pension expense for the enterprise fund.

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Khalil Turner · Answer 1

journal entries to record annual pension expenses are:

Explanation:

Amherst has planned to provide a definite pension plan to its employees and based on the investment plan, liabilities and actual returns following are the general entries of annual pension plans of Amherst city.

Service cost of 250,000$

Interest expense of 160,000

Cash 410,000

Plan assets and pension funds are 410,000

Service cost of 250,000

Interest expenses of 160,000