“Preparing a pension work sheet.
The accountant for Marlin Corporation has developed the following information for the company’s
defined benefit pension plan for 2013:
Service cost $500,000
Actual return on plan assets 240,000
Annual contribution to the plan 900,000
Amortization of prior service cost 125,000
Benefits paid to retirees 60,000
Settlement rate 10%
Expected rate of return on plan assets 8%
The accumulated benefit obligation at December 31, 2013, amounted to $3,250,000.
Instructions
(a) Using the above information for Marlin Corporation, complete the pension work sheet for
2013. Indicate (credit) entries by parentheses. Calculated amounts should be supported.
(b) Prepare the journal entry to reflect the accounting for the company’s pension plan for the year ended 12.31.2013.