Problem 20-1 (Part Level Submission) 2014 2015 (a) HARRINGTON COMPANY Pension Wo
ID: 2477498 • Letter: P
Question
Problem 20-1 (Part Level Submission)
2014
2015
(a)
HARRINGTON COMPANY
Pension Worksheet—2014 and 2015
General Journal Entries
Memo Record
Items
Annual Pension
Expense
Cash
OCI—Prior
Service Cost
OCI—Gain/
Loss
Pension Asset/
Liability
Projected Benefit
Obligation
Plan
Assets
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(b)
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Problem 20-1 (Part Level Submission)
On January 1, 2014, Harrington Company has the following defined benefit pension plan balances.Projected benefit obligation $4,516,000 Fair value of plan assets 4,206,800
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2015, the company amends its pension agreement so that prior service costs of $508,900 are created. Other data related to the pension plan are as follows.
2014
2015
Service cost $161,400 $182,900 Prior service cost amortization –0– 96,200 Contributions (funding) to the plan 244,800 286,200 Benefits paid 220,300 296,000 Actual return on plan assets 252,408 278,000 Expected rate of return on assets 6 % 8 %(a)
Prepare a pension worksheet for the pension plan for 2014 and 2015.HARRINGTON COMPANY
Pension Worksheet—2014 and 2015
General Journal Entries
Memo Record
Items
Annual Pension
Expense
Cash
OCI—Prior
Service Cost
OCI—Gain/
Loss
Pension Asset/
Liability
Projected Benefit
Obligation
Plan
Assets
Explanation / Answer
Answer:
HARRINGTON COMPANY Pension Worksheet—2014 and 2015 General Journal entries Memo record Items Annual Pension expense Cash OCI-PSC OCI-gain/Loss Pension asset/Liability Projected benefit obligation Plan assets Balance, Jan. 1, 2014 309200 4516000 4206800 (a) Service cost 161400 161400 (b) Interest cost 451600 451600 (c ) Actual return 252408 252408 (d) Contributions 244,800 244,800 (e ) Benefits 220300 220300 Journal entry, 12/31/14 360592 244,800 115,792 4908700 4,483,708 Accum OCI, 12/31/13 Balance, Dec. 31, 2014 424,992 4908700 4,483,708 f) Additional PSC 508900 508900 balance 1 jan, 2015 5417600 (g) Service cost 182900 182900 (h) Interest cost 541760 541760 (i) actual return 278000 278000 (j) Unexpected loss 80696.64 80696.64 (K) Amortization of PSC 96200 96200 (l) Contributions 286200 286200 (m) Benefits 296000 296000 Journal entry, 12/31/15 462163.36 286200 412700 80696.64 669,360 Accum OCI, 12/31/14 Balance, Dec. 31, 2015 412700 80696.64 1,094,352 5846260 4,751,908Related Questions
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