The following facts apply to the pension plan of Carla Inc. for the year 2020. Plan assets, January 1, 2020 $470,900
Projected benefit obligation, January 1, 2020 470,900
Settlement rate 8 % Service cost 38,500
Contributions (funding) 24,300
Actual and expected return on plan assets 46,800
Benefits paid to retirees 34,700

Required:
Using the preceding data, compute pension expense for the year 2020. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2020 and the year-end balances in the related pension accounts.

Solution:

                                                         Carla Inc.

                                           Pension Worksheet - 2020

                                    General journal Entries                       Memo Record

Items                   Annual pension   Cash    Pension           Projected      Plan

                                expense                    Asset/liability  benefit oblig.  assets

Balance, Jan 1                                                                     470,900    470,900

Service cost           38,500                                                 38,500

Interest cost           37,672                                                  37,672

Actual return          46,800                                                                    46,800

Contributions                              24,300                                               24,300

Benefits                                                                               34,700        34,700

Journal entry,        29,372          24,300     5072

Dec 31, 2020

Balance, Dec 31                                           5072             512,372        507,300

2020                        

answer; /// the above statement is (false);

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.