Farley Incorporated Instituted a Defined Benefit Pension Plan for Its

question 67

Essay

Farley Incorporated instituted a defined benefit pension plan for its employees at the beginning of 2013. An actuarial method that is acceptable under GAAP indicates that the company should contribute $80,000 each year to the pension fund to cover the benefits that will be paid to the employees. Farley funded 80% in 2013 and 2014, 90% in 2015 and 2016, and 100 percent in 2017.
Required:
(1) Prepare the journal entries to accrue the pension liability and fund it for 2013 through 2017.
(2) Compute the balance in the pension liability account as of December 31, 2017.

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Definitions:

Dendrites

Branchlike extensions of neurons that receive signals from other neurons.

Neurotransmitter

Chemical substances in the brain that transmit signals from one neuron to another, playing key roles in brain function and behavior.

Depression

A mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Acetylcholine

A neurotransmitter in the central and peripheral nervous systems that plays a key role in muscle activation and memory.