(Comprehensive 2 Year Worksheet) Hobbs Co. has the following defined benefit pension plan balances on January 1, 2012.
|
Projected benefit obligation |
$4,600,000 |
|
Fair value of plan assets |
4,600,000 |
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2013, the company amendsits pension agreement so that prior service costs of $600,000 are created. Other data related to the pension plan are:
|
2012 |
2013 |
|
|
Service cost |
$150,000 |
$170,000 |
|
Prior service cost amortization |
–0– |
90,000 |
|
Contributions (funding) to the plan |
200,000 |
184,658 |
|
Benefits paid |
220,000 |
280,000 |
|
Actual return on plan assets |
252,000 |
350,000 |
|
Expected rate of return on assets |
6% |
8% |
Instructions
(a) Prepare a pension worksheet for the pension plan in 2012.
(b) Prepare any journal entries related to the pension plan that would be needed at December 31, 2012.
(c) Prepare a pension worksheet for 2013 and any journal entries related to the pension plan as of December 31, 2013.
(d) Indicate the pension related amounts reported in the 2013 financial statements.