Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

How would you handle this situation?

Answered: 1 week ago

Question

Does it exceed two pages in length?

Answered: 1 week ago

Question

Does it avoid typos and grammatical errors?

Answered: 1 week ago