Solution-Prepare a pension worksheet for the pension plan

Prepare a pension worksheet for the pension plan

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Reference no: EM131876394

Question - On January 1, 2013, Laura's Living Company has the following defined benefit pension plan balances.

Projected benefit obligation	$5,700,000
Fair value of plan assets	7,200,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2014, the company amends its pension agreement so that service costs of $350,000 are created. Other data related to the pension plan are as follows.

	2013	2014
Service costs	$150,000	$165,000
Prior service costs amortization	$0	$63,000
Contributions (funding) to the plan	$168,000	$194,000
Benefits paid	$190,000	$220,000
Actual return on plan assets	$576,000	$498,000
Expected rate of return on assets	8%	7%

Required:

(a) Prepare a pension worksheet for the pension plan for 2013 and 2014.

(b) For 2014, prepare the journal entry to record pension-related amounts.

Reference no: EM131876394

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Prepare a pension worksheet for the pension plan

Reference no: EM131876394

Reference no: EM131876394

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