Defined Pension Benefit Plans 1) On 1/1/2012, Stuart Company has the following defined 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 1/1/2013, 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 Amortization 0 $97,000 Contributions (funding) to the plan $255,000 $305,000 Benefits Paid $225,000 $300,000 Actual Return on Plan Assets $320,000 $515,000 Expected Rate of Return on Assets 5% 8% 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 Items Annual Pension Cash OCI-Prior OCI-Pension Projected Benefit Plan Expense Service Cost Gain/Loss Asset/Liability Obligation Assets Balance 1/1/2012 a) Service Cost b) Interest Cost c) Actual Return d) Contributions e) Benefits Journal entry, 12/31/12 Accum. OCI 12/31/11 Balance, 12/31/2012 f) Additional PSC 1/1/2013 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, 12/31/2013 b) For 2013, prepare the journal entry to record pension-related amounts 2) Jones Co. has the following post-retiremen
t benefit plan balances on 1/1/2012 Accumulated Postretirement benefit obligation $2,535,000 Fair Value of Plan Assets $2,535,000 The Interest (settlement) rate applicable to the plan is 8%. On 1/1/2013, the company amends the plan so that prior service costs of $185,000 were created. Other data related to the pension plan are as follows: 2012 2013 Service Costs $80,000 $87,000 Prior Service Costs Amortization $0 $13,000 Contributions (funding) to the plan $47,000 $38,000 Benefits Paid $41,000 $43,000 Actual Return on Plan Assets $200,000 $155,000 Expected Rate of Return on Assets 9% 7% Instructions: Prepare a worksheet for the postretirement plan for 2012 & 2013 Jones Co. Pension Worksheet – 2012 & 2013 General Journal Entries Memo Record Items Annual DR/ Cash DR/ OCI- Prior DR/ OCI- DR/ Pension DR/ Accum DR/ Plan DR/ Expense CR CR Service Cost CR Gain/Loss CR Asset/ CR Projected CR Assets CR Liability Benefit Obligation Balance, 1/1/2012 Service Cost Interest Cost Actual Return Unexpected Loss Contributions Benefits Journal Entry, 12/31/12 Accum OCI, 12/31/11 Balance 12/31/2012 Additional PSC, 1/1/2013 Balance 1/1/2013 Service Cost Interest Cost Actual Return Unexpected loss Amortization of PSC Contributions Benefits Journal Entry, 12/31/13 Accum OCI, 12/31/12 Balance, 12/31/2013 b) Prepare any journal entries related to the postretirement plan that would be needed at 12/31/2012 c) Prepare any journal entries related to the postretirement