(3 Year Worksheet, Journal Entries, and Reporting) Jackson Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2011, with the following beginning balances: plan assets $200,000; projected benefit obligation $250,000. Other data relating to 3 years’ operation of the plan are shown on the next page.
|
2011 |
2012 |
2013 |
|
|
Annual service cost |
$16,000 |
$ 19,000 |
$ 26,000 |
|
Settlement rate and expected rate of return |
10% |
10% |
10% |
|
Actual return on plan assets |
18,000 |
22,000 |
24,000 |
|
Annual funding (contributions) |
16,000 |
40,000 |
48,000 |
|
Benefits paid |
14,000 |
16,400 |
21,000 |
|
Prior service cost (plan amended, 1/1/12) |
160,000 |
||
|
Amortization of prior service cost |
54,400 |
41,600 |
|
|
Change in actuarial assumptions establishes a December 31, 2013, projected benefit obligation of: |
520,000 |
Instructions
(a) Prepare a pension worksheet presenting all 3 years’ pension balances and activities.
(b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.
(c) Indicate the pension related amounts reported in the financial statements for 2013.