(Comprehensive 2-Year Worksheet) Glesen Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2011 and 2012.

Instructions

(a) Prepare a pension worksheet presenting both years 2011 and 2012 and accompanying computations and amortization of the loss (2012) using the corridor approach.

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

(c) For 2012, indicate the pension amounts reported in the financial statements.

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2011 2012 Projected benefit obligation, January 1 $650,000 Plan assets (fair value and market related value), January 1 410,000 Pension asset/liability, January 1 240,000 Cr. Prior service cost, January 1 160,000 Service cost 40,000 $ 59,000 Settlement rate 10% 10% Expected rate of return 10% 10% Actual return on plan assets Amortization of prior service cost 36,000 61,000 70,000 55,000