Question
Waterway Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2016, with the following beginning balances: plan assets $197,500; projected benefit
Waterway Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2016, with the following beginning balances: plan assets $197,500; projected benefit obligation $248,000. Other data relating to 3 years operation of the plan are as follows.
2016 2017 2018
Annual service cost $16,000 $19,400 $25,800
Settlement rate and expected rate of return 10 % 10 % 10 %
Actual return on plan assets 17,900 21,730 23,800
Annual funding (contributions) 16,000 39,600 48,400
Benefits paid 14,100 16,200 21,300
Prior service cost (plan amended, 1/1/17) 157,600
Amortization of prior service cost 55,200 42,400
Change in actuarial assumptions establishes a
December 31, 2018, projected benefit obligation of: 518,500
a. Prepare a pension worksheet presenting all 3 years pension balances and activities.
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