Complete the following exercise. Submit journal entries in an Excel file and written segments in an MS Word document. Label each question clearly.

Melanie Vail Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2012, the following balances relate to this plan.

Plan assets $480,000
Projected benefit obligation 625,000
Accumulated OCI (PSC) 100,000 Dr.

As a result of the operation of the plan during 2012, the following additional data are provided by the actuary.

Service cost for 2012 $90,000
Settlement rate 9%
Actual return on plan assets in 2012 57,000
Amortization of prior service cost 19,000
Expected return on plan assets 52,000
Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 76,000
Contributions in 2012 99,000
Benefits paid retirees in 2012 85,000

attched file isthe spreadsheets you will need for this exercise.

  1. Use the spreadsheet Pensions to prepare a pension worksheet. On the pension worksheet, compute pension expense, pension asset/liability, projected benefit obligation, plan assets, prior service cost, and net gain or loss.
  2. Compute the same items as in (1), assuming that the settlement rate is now 7% and the expected rate of return is 10%.
  3. Prepare the journal entry using the spreadsheet Journal Entries to record pension expense in 2012.
  4. Indicate the reporting of the 2012 pension amounts in the income statement and balance sheet using the spreadsheet Pensions.