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On January 1, 2012, Harrington Company has the following defined benefit pension plan balances. Projected benefits obligation $5,600,000 Fair value of plan assets 6,400,000 The
On January 1, 2012, Harrington Company has the following defined benefit pension plan balances. | ||||||||
Projected benefits obligation | $5,600,000 | |||||||
Fair value of plan assets | 6,400,000 | |||||||
The interest (settlement) rate applicable to the plan is | 9% | On January 1, 2013, the company amends its pension | ||||||
agreement so that service costs of | $620,000 | are created. Other data related to the pension plan are as follows: | ||||||
2012 | 2013 | |||||||
Service costs | $180,000 | $195,000 | ||||||
Prior service costs amortization | 0 | 97,000 | ||||||
Contributions (funding) to the plan | 255,000 | 305,000 | ||||||
Benefits paid | 225,000 | 300,000 | ||||||
Actual return on plan assets | 320,000 | 515,000 | ||||||
Expected rate of return on assets | 5% | 8% | ||||||
Instructions: | ||||||||
(a) Prepare a pension worksheet for the pension plan for 2012 and 2013. | ||||||||
HARRINGTON COMPANY | ||||||||
Pension Worksheet2012 and 2013 | ||||||||
General Journal Entries | Memo Record | |||||||
Items | Annual Pension Expense | Cash | OCI - Prior Service Cost | OCI - Gain/Loss | Pension Asset/ Liability | Projected Benefit Obligation | Plan Assets | |
Balance, Jan. 1, 2012 | ||||||||
(a) Service cost | ||||||||
(b) Interest cost | ||||||||
(c) Actual return | ||||||||
(d) Contributions | ||||||||
(e) Benefits | ||||||||
Journal entry, 12/31/12 | ||||||||
Accum OCI, 12/31/11 | ||||||||
Balance, Dec. 31, 2012 | ||||||||
(f) Additional PSC | ||||||||
January 1, 2013 | ||||||||
(g) Service cost | ||||||||
(h) Interest cost | ||||||||
(i) Actual return | ||||||||
(j) Unexpected loss | ||||||||
(k) Amortization of PSC | ||||||||
(l) Contributions | ||||||||
(m) Benefits | ||||||||
Journal entry, 12/31/13 | ||||||||
Accum OCI, 12/31/12 | ||||||||
Balance, Dec. 31, 2013 | ||||||||
Area for calculations as desired | ||||||||
(b) For 2013, prepare the journal entry to record pension-related amounts. | ||||||||
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