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Howard Corp. sponsors a defined-benefit pension plan for its employees.On January 1, 2011, the following balances related to this plan. Plan assets (market-related value) $500,000

Howard Corp. sponsors a defined-benefit pension plan for its employees.On January 1, 2011, the following balances related to this plan.

Plan assets (market-related value) $500,000

Projected benefit obligation 600,000

OCI - Prior service cost 75,000

OCI - Loss 70,000

As a result of the operation of the plan during 2011, the actuary provided the following additional data at December 31, 2011.

Service cost for 2011$ 75,000

Actual return on plan assets in 2011 45,000

Amortization of prior service cost 20,000

Contributions in 2011 115,000

Benefits paid retirees in 201170,000

Interest rate7%

Expected return rate10%

Average remaining service life of active employees 10 years

Instructions

(a)Using the above information to complete the pension work sheet for 2011 (see the next page). Indicate (credit) entries by parentheses.

(b)Prepare the journal entry to reflect the accounting for the company's pension plan for the year ending December 31, 2011.

image text in transcribed
Howard Corp.~ Pension Worksheet-2011

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