Harrington Company Has the Following Defined Benefit Pension Plan Balances.
Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
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 agreement so that service costs of $620,000 9% On January 1, 2013, the company amends its pension are created. Other data related to the pension plan are as follows: 2012 $180,000 0 255,000 225,000 320,000 5% 2013 $195,000 97,000 305,000 300,000 515,000 8%
Service costs Prior service costs amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return 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 Items 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 Annual Pension Expense 180,000 504,000 (320,000) (255,000) 364,000 (255,000) 0 0 (109,000) 691,000 620,000 195,000 601,110 (515,000) (25,000) 97,000 (305,000) Cash OCI - Prior Service Cost OCI Gain/Loss Pension Asset/ Liability 800,000
Memo Record Projected Plan Benefit Assets Obligation (5,600,000) 6,400,000 (180,000) (504,000) 320,000 255,000 225,000 (225,000)
(6,059,000) (620,000) (6,679,000) (195,000) (601,110)
6,750,000
515,000 25,000 (97,000) 300,000 305,000 (300,000)
353,110
(305,000)
523,000 0 523,000
25,000 0 25,000
(596,110) 94,890 (7,175,110) 7,270,000
(b) For 2013, prepare the journal entry
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 agreement so that service costs of $620,000 9% On January 1, 2013, the company amends its pension are created. Other data related to the pension plan are as follows: 2012 $180,000 0 255,000 225,000 320,000 5% 2013 $195,000 97,000 305,000 300,000 515,000 8%
Service costs Prior service costs amortization Contributions (funding) to the plan Benefits paid Actual return on plan assets Expected rate of return 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 Items 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 Annual Pension Expense 180,000 504,000 (320,000) (255,000) 364,000 (255,000) 0 0 (109,000) 691,000 620,000 195,000 601,110 (515,000) (25,000) 97,000 (305,000) Cash OCI - Prior Service Cost OCI Gain/Loss Pension Asset/ Liability 800,000
Memo Record Projected Plan Benefit Assets Obligation (5,600,000) 6,400,000 (180,000) (504,000) 320,000 255,000 225,000 (225,000)
(6,059,000) (620,000) (6,679,000) (195,000) (601,110)
6,750,000
515,000 25,000 (97,000) 300,000 305,000 (300,000)
353,110
(305,000)
523,000 0 523,000
25,000 0 25,000
(596,110) 94,890 (7,175,110) 7,270,000
(b) For 2013, prepare the journal entry