QUESTION 7 (12 Marks)

The accountant for Camberwell Corp has developed the following information regarding the company's defined benefit pension plan for 2012:

Service cost---------------------------------------------------------------------------------------------------- $600,000

Actual return on plan assets------------------------------------------------------------------------------ 315,000

Contributions------------------------------------------------------------------------------------------------- 1,080,000

Amortization of unrecognized past service costs------------------------------------------------- 126,000

Benefits paid to retirees-------------------------------------------------------------------------------------- 72,000

Interest rate on ABO---------------------------------------------------------------------------------------------- 10%

Expected rate of return on plan assets---------------------------------------------------------------------- 8%

Required:

(a) Using the above information, complete the pension work sheet below for 2012. Indicate credit entries by parentheses, e.g. (72,000).

(b) Prepare the journal entries to reflect the accounting for the company's pension plan for the year ending December 31, 2012.

Camberwell Corp Pension Work Sheet2012
	General Journal Entries					Memo Entries
	Unrecognized Annual Pension Expense	Cash	Accrued Pension Asset/Liab	Accrued Benefit Obligation	Plan Assets	Unrecognized Past Service Cost	Net (Gain) or Loss
Bal., Dec. 31, 2011			(450,000)	(4,500,000)	3,300,000	750,000
Service cost
Interest cost
Expected return
Amortization of PSC
Contributions
Benefits paid
Unrecognized gain/loss
Journal entry for 2012
Bal., Dec. 31, 2012