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 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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