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Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield

AC557

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 Worksheet2012 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 to record pension-related amounts. Pension Expense Other Comprehensive Income (PSC) Other Comprehensive Income (G/L) Cash Pension Asset/Liability

353,110 523,000 25,000 305,000 596,110

131347608.xlsx.ms_office, Problem 20-1, Page 1 of 2, 2/26/2013, 6:39 PM

Name: Instructor: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
P20-2 Allison Co. has the following postretirement benefit plan balances on January 1, 2012. Accumulated Postreitrement benefit obligation $2,535,000 Fair value of plan assets 2,535,000 The interest (settlement) rate applicable to the plan is so that prior service costs of

Date: Course:

AC557

$185,000

8% On January 1, 2013, the company amends the plan were created. Other data related to the pension plan are as follows: 2012 $80,000 0 47,000 41,000 200,000 9% 2013 $87,000 13,000 38,000 43,000 155,000 7%

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 worksheet for the postreitrement plan for 2012 & 2013.

Allison Co. Pension Worksheet2012 and 2013 General Journal Entries Items Balance, Jan. 1, 2012 Service cost Interest cost Actual return Unexpected Loss Contributions Benefits Journal entry, 12/31/12 Accum OCI, 12/31/11 Balance, Dec. 31, 2012 Additional PSC 1/1/2013 Balance, Jan 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, Dec. 31, 2013 Area for calculations as desired Area for calculations as desired Area for calculations as desired Annual Expense DR/ CR Cash DR/ OCI - Prior DR/ CR Service Cost CR OCI Gain/Loss DR/ CR Pension Asset/ Liability DR/ CR

80,000 202,800 (200,000) (28,150) (47,000)

Memo Record Accum Projected DR/ Plan Benefit CR Assets Obligation (2,535,000) 2,535,000 (80,000) (202,800) 200,000 47,000 41,000

DR/ CR

228150

28,150 (41,000)

54,650

(47,000)

28,150

(35,800) (35,800) 0 (2,858,800) (185,000) (3,043,800) (87,000) (243,504) 0 2,823,000

185,000 87,000 243,504 (155,000) (42,610) 13,000 (38,000)

155,000 42,610 (13,000) (43,000) 38,000 43,000

145,894

(38,000)

172,000 172,000

42,610 28,150 70,760

(322,504) (358,304) (3,417,304) 3,059,000

(b) Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2012. Pension expense 54,650 OCI - Gain/Loss 28,150 Pension Asset/Liability 35,800 Cash 47,000 (c) Prepare any journal entries related to the postretirement plan as of December 31, 2013. Pension Expense 145,894 Other Comprehensive Income (PSC) 172,000 OCI - Gain/Loss 42,610 Cash Pension Asset/Liability

38,000 322,504

(d) Show the postretirement-benefitrelated amounts reported in the 2013 Income Statement and Balance Sheet. Financial Statements -2013 Income Statement 145,894 Comprehensive Income Statement Net Income Other comprehensive income (loss) (42,610) (185,000) 13,000 Comprehensive Income Balance Sheet Liabilities 358,304 Stockholder's Equity 172,000 70,760

XXXXX

(214,610) XXXXX