The following defined-benefit pension data of Doreen Corp. apply to year 2008. P

Question

The following defined-benefit pension data of Doreen Corp. apply to year 2008. Projected benefit obligation, January 1, 2008 (before amendment) - $560,000 Plan assets, January 1,2008 - 546,200 Pension liability - 13,800 On January 1, 2008, Doreen Corp. through plan amendment, grants prior service benefits having a present value of settlement rate - 100,000 Settlement rate - 9% Annual pension service-cost - 58,000 Contribution (funding) - 55,000 Actual return on plan assets - 52,280 Benefits paid to retirees - 40,000 Prior service cost of amortization for 2008 - 17,000 For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

Explanation / Answer

The following defined pension data of Doreen Corp. apply to the year 2008. Projected benefit obligation, 1/1/08 (before amendment) $560,000 Plan assets, 1/1/08 546,200 Prepaid/accrued pension cost (credit) 13,800 On January 1, 2008, Doreen Corp., through plan amendment, grants prior service benefits having a present value of 100,000 Settlement rate 9% Service cost 58,000 Contributions (funding) 55,000 Actual (expected) return on plan assets 52,280 Benefits paid to retirees 40,000 Prior service cost amortization for 2008 17,000 Instructions For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

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