For pension expense the JE is:
Dr Net Periodic pension cost
Cr Pension Benefit Liability
Cr OCI
Here is an example from Becker:
Facts: Co contributed $420,000 to pension plan in y2. Co paid $350,000 in y2 and expects to pay $250,000 in y3. 40% tax rate
1. To record the contribution to the pension plan
Pension benefit liability 420,000
cash 420,000
2. Record the 30,000 net loss incurred during y2 and DTA of 12,000 (30,000 * 40%) **no idea what the 30,000 loss is?**
OCI 30,000 (put into AOCI)
pension benefit liability -noncurrent 30,000
DTA 12,000
deferred tax benefit – OCI 12,000
3. Record y2 service cost, interest cost and return on plan assets (400,000+116,000-20,000 = 496,000) and DTA or $198,400 (496,000*.4)
Net periodic pension plan 496,000
pension benefit liability – current 496,000
DTA 198,400
deferred tax benefit – I/S 198,400
4. Rcord the 25,000 reclass adj from OCI to the IS for y2 amortization or prior service cost and relcass of the DTA (25,000*.4)
Net periodic pension cost 25,000
OCI 25,000 (take out of AOCI)
DT benefit -OCI 10,000
DT benefit – I/S 10,000
5. Record the 19,000 reclass adju from OCI to the I/S for y2 amortization of the net loss and reclass of the DT benefit (19,000 *.4)
Net periodic pension cost 19,000
OCI 19,000
DTbenefit – OCI 7600
DT benfit – I/S 7,600
6. Record amortization of existing net transition obligation
net periodic pension cost 5,000
OCI 5,000 (take out of AOCI)
DT benefit – OCI 2,000
DT benefit – I/S 2,000
IF THIS MAKES SENSE TO YOU I AM JEALOUS! THIS IS JUST TO PROVIDE YOU WITH THE ENTRIES – DONT ASK ME TO EXPLAIN THEM LOL!!!
A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!
Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.
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