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P20-1 (2-Year Worksheet) On January 1, 2014, Harrington Company has the following defined benefit pension plan balances. Projected benefits obligation $4,500,000 Fair value of plan
P20-1 (2-Year Worksheet) On January 1, 2014, Harrington Company has the following defined benefit pension plan balances. | ||||||||
Projected benefits obligation | $4,500,000 | |||||||
Fair value of plan assets | 4,200,000 | |||||||
The interest (settlement) rate applicable to the plan is | 10% | On January 1, 2015, the company amends its pension | ||||||
agreement so that service costs of | $500,000 | are created. Other data related to the pension plan are as follows: | ||||||
2014 | 2015 | |||||||
Service costs | $150,000 | $180,000 | ||||||
Prior service costs amortization | 0 | 90,000 | ||||||
Contributions (funding) to the plan | 240,000 | 285,000 | ||||||
Benefits paid | 200,000 | 280,000 | ||||||
Actual return on plan assets | 252,000 | 260,000 | ||||||
Expected rate of return on assets | 6% | 8% | ||||||
Instructions: | ||||||||
(a) Prepare a pension worksheet for the pension plan for 2014 and 2015. |
(b) For 2015, prepare the journal entry to record pension-related amounts. |
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