ACCT 557 Week 3 Homework; Problem 20-1, 20-2

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ACCT 557 Intermediate Accounting III – DeVry

Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield
P20-1
On January 1, 2012, Harrington Company has the following defined benefit pension plan balances.
 Projected benefits obligation$5,600,000 
 Fair value of plan assets6,400,000 
 
The interest (settlement) rate applicable to the plan is9%On January 1, 2013, the company amends its pension 
agreement so that service costs of$620,000are created.  Other data related to the pension plan are as follows:
 
 20122013 
 Service costs$180,000$195,000 
 Prior service costs amortization097,000 
 Contributions (funding) to the plan255,000305,000 
 Benefits paid225,000300,000 
 Actual return on plan assets320,000515,000 
 Expected rate of return on assets5%8% 
 
Instructions:
(a) Prepare a pension worksheet for the pension plan for 2012 and 2013.
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 8% 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:
 
  2012 2013  
 Service costs $80,000 $87,000  
 Prior service costs amortization 0 13,000  
 Contributions (funding) to the plan 47,000 38,000  
 Benefits paid 41,000 43,000  
 Actual return on plan assets 200,000 155,000  
 Expected rate of return on assets 9% 7%  
 
Instructions:
(a) Prepare a worksheet for the postreitrement plan for 2012 & 2013.
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    ACCT 557 Week 3 Homework; Problem 20-1, 20-2
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