Mount Co. has the following defined-benefit pension plan balances on January 1, 2008.

Projected benefit obligation.............................$4,500,000

Fair value of plan assets........................................4,500,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2009, the company amends its pension agreement so that prior 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 2008.

(b) Prepare any journal entry(ies) related to the pension plan that would be needed at December 31, 2008.

(c) Prepare a pension worksheet for 2009 and any journal entry(ies) related to the pension plan as of December 31, 2009.

(d) Indicate the pension-related amounts reported in the 2009 financial statements.

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2008 2009 Service costs $150,000 $170,000 Prior service costs amortization -0- 90,000 Contributions (funding) to the plan Benefits paid 150,000 184,658 220,000 280,000 Actual return on plan assets Expected rate of return on assets 252,000 250,000 6% 8%