ACC557 HOMEWORK QUESTION
ProfArgeolIntermediate 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 assets2,535,000
The interest (settlement) rate applicable to the plan is8%On January 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:
20122013
Service costs$80,000 $87,000
Prior service costs amortization0 13,000
Contributions (funding) to the plan47,000 38,000
Benefits paid41,000 43,000
Actual return on plan assets200,000 155,000
Expected rate of return on assets9%7%
Instructions:
(a) Prepare a worksheet for the postreitrement plan for 2012 & 2013.
Allison Co.
Pension Worksheet—2012 and 2013
General Journal EntriesMemo Record
Items"Annual
Expense"DR/CRCashDR/CROCI - Prior Service CostDR/CROCI - Gain/LossDR/CR"Pension
Asset/
Liability"DR/CRAccum Projected Benefit ObligationDR/CR"Plan
Assets"DR/CR
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
(b) Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2012.
(c) Prepare any journal entries related to the postretirement plan as of December 31, 2013.
(d) Show the postretirement-benefit–related amounts reported in the 2013 Income Statement and Balance Sheet.
Financial Statements -2013
Income Statement
0
Comprehensive Income Statement
Net IncomeXXXXX
Other comprehensive income (loss)
0
0
0 0
Comprehensive IncomeXXXXX
Balance Sheet
Liabilities
0
Stockholder's Equity
0
0
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