Hobbs Co. has the following defined benefit pension plan balances on January 1, 2020. Projected benefit obligation............................$4,600,000Fair

Question:

Hobbs Co. has the following defined benefit pension plan balances on January 1, 2020.

Projected benefit obligation............................$4,600,000Fair value of plan assets.....................................4,600,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $600,000 are created. Other data related to the pension plan are:

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Instructions

a. Prepare a pension worksheet for the pension plan in 2020.

b. Prepare any journal entries related to the pension plan that would be needed at December 31, 2020.

c. Prepare a pension worksheet for 2021 and any journal entries related to the pension plan as of December 31, 2021.

d. Indicate the pension-related amounts reported in the 2021 financial statements.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1119503668

17th edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel

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