Problem 20-01

On January 1, 2020, Blue Company has the following defined benefit pension plan balances.

Projected benefit obligation		$4,455,000
Fair value of plan assets		4,270,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $504,000 are created. Other data related to the pension plan are as follows.

		2020			2021
Service cost		$147,000			$183,000
Prior service cost amortization		0			91,000
Contributions (funding) to the plan		244,000			280,000
Benefits paid		203,000			283,000
Actual return on plan assets		256,200			260,000
Expected rate of return on assets		6	%		8	%

Prepare a pension worksheet for the pension plan for 2020 and 2021.