The following data relate to the defined benefit pension plan of Haan Company: Balances at January 1,

Question:

The following data relate to the defined benefit pension plan of Haan Company:
Balances at January 1, 2013:
PBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,500
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150
Fair value of pension assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,000
ABO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,800
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7%
Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10%
Activity for 2013:
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $400
Benefit payments to retirees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Contributions to pension fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Prior service cost amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Instructions:
Prepare a pension work sheet for Haan Company for 2013.
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...