2023 On January 1 2012 Harrington Company has the following defined benefit pension plan balances Projected benefits obligation 5 600 000 | Assignments Online
2023 On January 1 2012 Harrington Company has the following defined benefit pension plan balances Projected benefits obligation 5 600 000 | Assignments Online
Assignments Online 2023 Business Finance
On January 1, 2012, Harrington Company has the following defined benefit pension plan balances.
Projected benefits obligation $5,600,000
Fair value of plan assets 6,400,000
The interest (settlement) rate applicable to the plan is 9%. On January 1, 2013, the company amends its pension
agreement so that service costs of $620,000 are created. Other data related to the pension plan are as follows:
2012 2013
Service costs $180,000 $195,000
Prior service costs 0 97,000 amortization
Contributions (funding) 255,000 305,000 to the plan
Benefits paid 225,000 300,000
Actual return on plan 320,000 515,000 assets
Expected rate of return 5% 8% on assets
Instructions:
(a) Prepare a pension worksheet for the pension plan for 2012 and 2013.
HARRINGTON COMPANY
Pension Worksheet—2012 and 2013
General Journal Entries Memo Record
The 7 general journal entries are:
“Annual
Pension
Expense”
“Cash”
“OCI – Prior Service Cost”
“OCI – Gain/Loss”
“Pension
Asset/
Liability”
“Projected
Benefit
Obligation”
“Plan
Assets”
The below items include:
Balance, Jan. 1, 2012
(a) Service cost
(b) Interest cost
(c) Actual return
(d) Contributions
(e) Benefits
Journal entry, 12/31/12
Accum OCI, 12/31/11
Balance, Dec. 31, 2012
(f) Additional PSC
January 1, 2013
(g) Service cost
(h) Interest cost
(i) Actual return
(j) Unexpected loss
(k) Amortization of PSC
(l) Contributions
(m) Benefits
Journal entry, 12/31/13
Accum OCI, 12/31/12
Balance, Dec. 31, 2013
Area for calculations as desired
(b) For 2013, prepare the journal entry to record pension-related amounts.
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