Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2015 and 2016.

Instructions

(a) Prepare a pension worksheet presenting both years 2015 and 2016.

(b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.

(c) For 2016, indicate the pension amounts reported in the financial statements.

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2015 Defined benefit obligation, January 1 Plan assets (fair value), January 1 Pension asset/liability, January 1 Service cost R600,000 410,000 190,000 Cr. 40,000 2016 R 59,000 Discount (interest) rate 10% 10% Actual return on plan assets 36,000 61,000 Annual contributions 97,000 81,000 Benefits paid retirees 31,500 54,000 Increase in defined benefit obligation due to changes in actuarial assumptions 87,000 --o-- Accumulated benefit obligation at December 31 721,800 789,000 Vested benefit obligation at December 31 464,000