Penn Manufacturing Company offers a defined-benefit pension plan to its salaried employees. The following information summarizes events related to the Penn pension plan for 2018 through 2020.

Required

a. Provide the necessary computations and journal entries for Penn Manufacturing for 2018, 2019, and 2020.

b. Prepare the worksheet that summarizes the income statement and balance sheet activity and the pension journal entries for 2018, 2019, and 2020.

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Description 2018 2019 2020 Pan assets at the beginning of the year (atfair value, which is as sumed to equal the market-re ated asset value) Solve $680 000 Sove Projected benefit obligaton (PBO1 at the beginning of the year Salve Solve $680 000 $41,760 38 880 Serv ce cost for the year $40,320 8% 8% 8% Settlement rate Expected return on plan assets 6% 6% 6% $ 42,000 $ 36 000 $ 25 000 $ 10 000 $ 2,000 $37500 $30.240 Actual return on p an assets Contr butions for the year $40,000 $45,000 Benefit pa yments for the year $32.000 $30 000 Pror servce costs granted on 1/1/2018 $ 2,000 Amor:izat on of prior service costs Solve Decrease in the end ng projected benefit obligation dueto changes n actuarial assumptions (i e., actuar al gain) $97600 5 years 5 years Average remaining servce life of emp oyee base 5 years