P20-1
(2-Year Worksheet)
On January
1, 2014, Harrington Company has the following defined benefit pension plan
balances. Projected benefit obligation $4,500,000 Fair value of plan assets
4,200,000. The interest (settlement) rate applicable to the plan is 10%. On
January 1, 2015, the company amends its pension agreement so that prior service
costs of $500,000 are created.
Other data
related to the pension plan are as follows.
2014 2015
Service cost
$150,000
$180,000
Prior
service cost amortization -0-
90,000
Contributions
(funding) to the plan 240,000
285,000
Benefits
paid 200,000
280,000
Actual
return on plan assets 252,000
260,000
Expected
rate of return on assets 6%
8% (a)
Prepare a
pension worksheet for the pension plan for 2014 and 2015
TUTORIAL PREVIEW
(a)
HARRINGTON COMPANY
Pension Worksheet—2014 and 2015
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General Journal Entries
|
Memo Record
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Items
|
Annual Pension Expense
|
Cash
|
OCI—Prior
Service Cost
|
OCI—Gain/
Loss
|
Pension
Asset/Liability
|
Projected Benefit Obligation
|
Plan
Assets
| |
Balance, Jan. 1, 2014
|
300,000 Cr.
|
4,500,000 Cr.
|
4,200,000 Dr.
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Service cost
|
150,000 Dr.
|
150,000 Cr.
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Interest cost*
|
450,000 Dr.
|
450,000 Cr.
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