|Projected benefit obligation, 1/1/12 (before amendment)||560,000|
|Plan assets, 1/1/12||546,200|
|On January 1, 2012, Rydell Corp., through plan amendment,|
|grants prior service benefits having a present value of||120,000|
|Actual (expected) return on plan assets||52,280|
|Benefits paid to retirees||40,000|
|Prior service cost amortization for 2012||17,000|
For 2010, prepare a pension worksheet for Rydell Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts
E22-19 A partial trial balance of Dickinson Corporation is as follows on December 31, 2012.
|Salaries and Wages Payable||1,500|
P20-4 Gordon Company sponsors a defined benefit
|Plan assets (fair value), December 31||$699,000||$849,000|
|Projected benefit obligation, January 1||700,000||800,000|
|Pension asset/liability, January 1||140000||?|
|Prior service cost, January 1||250,000||240,000|
|Actual and expected return on plan assets||24,000||30,000|
|Amortization of prior service cost||10,000||12,000|
|Accumulated benefit obligation, December 31||500,000||550,000|
P22-6 On December 31, 2012, before the books were closed, the management and accountants of Madrasa Inc. made the following determinations about three depreciable assets.
1. Depreciable asset A was purchased January 2, 2009. It originally cost $540,000 and, for depreciation
purposes, the straight-line method was originally chosen. The asset was originally expected to be
useful for 10 years and have a zero salvage value. In 2012, the decision was made to change the depreciation method from straight-line to sum-of-the-years’ digits, and the estimates relating to useful
life and salvage value remained unchanged.
2. Depreciable asset B was purchased January 3, 2008. It originally cost $180,000 and, for depreciation
purposes, the straight-line method was chosen. The asset was originally expected to be useful for 15
years and have a zero salvage value. In 2012, the decision was made to shorten the total life of this
asset to 9 years and to estimate the salvage value at $3,000.
3. Depreciable asset C was purchased January 5, 2008. The asset’s original cost was $160,000, and this
amount was entirely expensed in 2008. This particular asset has a 10-year useful life and no salvage
value. The straight-line method was chosen for depreciation purposes.
1. Income in 2012 before depreciation expense amounted to $400,000.
2. Depreciation expense on assets other than A, B, and C totaled $55,000 in 2012.
3. Income in 2011 was reported at $370,000.
4. Ignore all income tax effects.
5. 100,000 shares of common stock were outstanding in 2011 and 2012.
(a) Prepare all necessary entries in 2012 to record these determinations.
(b) Prepare comparative retained earnings statements for Madrasa Inc. for 2011 and 2012. The company had retained earnings of $200,000 at December 31, 2010.