Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B.

It takes a couple of days to assemble the information you need, but you finally get it all together and summarize it as follows:

Pension Plan

	2014	2015
Projected Benefit Obligation	65,000
Plan Assets (fair value), January 1	41,000
Pension asset/liability January 1 (credit)	24,000
Prior service cost, January 1	16,000
Service cost	4,000	5,900
Settlement rate	10%	10%
Expected rate of return	10%	10%
Actual return on plan assets	3,600	6,100
Amortization of prior service cost	7,000	5,500
Annual contributions	7,200	8,100
Benefits paid to retirees	3,150	5,400
Increase in pension benefit obligations due to actuarial assumptions	8,700	0
Accumulated benefit obligations at December 31	72,180	78,900
Average service life of all employees		20 years
Vested benefit obligationDecember 31		46,400

Tasks:

• Prepare a pension worksheet using Microsoft Excel for both years 2014 and 2015 and the necessary computations and amortization of the loss (2015), using the corridor approach.
• Prepare in the same worksheet the journal entries to reflect all pension plan transactions and events at December 31 of each year.
• For 2015, indicate (in the same worksheet) the pension amounts to be reported in the financial statements.
• Explain alternative measures for valuing the pension obligation. What would you advise for Panache?