(Postretirement Benefit Worksheet—2 Years) Elton Co. has the following postretirement benefit plan balances on January 1, 2012.
|
Accumulated postretirement benefit obligation |
$2,250,000 |
|
Fair value of plan assets |
2,250,000 |
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2013, the company amends the plan so that prior service costs of $175,000 are created. Other data related to the plan are:
|
2012 |
2013 |
|
|
Service costs |
$ 75,000 |
$ 85,000 |
|
Prior service costs amortization |
–0– |
12,000 |
|
Contributions (funding) to the plan |
45,000 |
35,000 |
|
Benefits paid |
40,000 |
45,000 |
|
Actual return on plan assets |
140,000 |
120,000 |
|
Expected rate of return on assets |
8% |
6% |
Instructions
(a) Prepare a worksheet for the postretirement plan in 2012.
(b) Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2012.
(c) Prepare a worksheet for 2013 and any journal entries related to the postretirement plan as of December 31, 2013.
(d) Indicate the postretirement benefit–related amounts reported in the 2013 financial statements.