Hobbs Co. has the following defined benefit pension plan balances on January 1, 2015.

The discount (interest) rate applicable to the plan is 10%. On January 1, 2016, the company amends its pension agreement so that past service costs of €600,000 are created. Other data related to the pension plan are as follows.

Instructions

(a) Prepare a pension worksheet for the pension plan in 2015.

(b) Prepare any journal entries related to the pension plan that would be needed at December 31, 2015.

(c) Prepare a pension worksheet for 2016 and any journal entries related to the pension plan as of December 31, 2016.

(d) Indicate the pension-related amounts reported in the 2016 financial statements.

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Defined benefit obligation Fair value of plan assets 4,600,000 4,600,000