Solution for QID #92297: On January 1, 2016, Baznik Company adopted a defined benefit | StudyHelpMe

On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,230,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016: Employee Expected Years of Future Service A 1 B 3 C 4 D 5 E 5 F 6   Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the components of Baznik's pension expense, in addition to the amortization of the prior service cost for 2016 and 2017: 2016 2017 Service cost $406,100 $501,213 Interest cost on projected benefit obligation 114,900 151,937 Expected return on plan assets — 77,600     Baznik contributed $799,300 and $829,900 to the pension fund at the end of 2016 and 2017, respectively. Required: 1. Next Level Prepare a set of schedules for Baznik to determine (a) the amortization fraction for each year and (b) the amortization of the prior service cost. 2. Next Level Prepare all the journal entries related to Baznik's pension plan for 2016 and 2017.     CHART OF ACCOUNTS Baznik Company General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 251 Accrued/Prepaid Pension Cost 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings 916 Other Comprehensive Income: Prior Service Cost REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 522 Pension Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense