On January 1, 2010, Diana Peter Company has the following defined benefit pension plan balances.

Defined benefit obligation..........................................................€4,200,000

Fair value of plan assets................................................................4,200,000

The discount rate applicable to the plan is 10%. On January 1, 2011, the company amends its pension agreement so that past service costs of €500,000 are created. Other data related to the pension plan are as follows.

Instructions

(a) Prepare a pension worksheet for the pension plan for 2010 and 2011.

(b) As of December 31, 2011, prepare a schedule reconciling the funded status with the reported liability.

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2010 2011 Service costs Unrecognized past service costs amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return on assets 150,000 180,000 90,000 185,000 280,000 260,000 -0 140,000 200,000 252,000 6% 8%