ACCT557 WEEK 3

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Name:  Date:    
Instructor:  Course:    
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield  
   
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.  
   
HARRINGTON COMPANY  
Pension Worksheet—2012 and 2013  
 General Journal EntriesMemo Record  
ItemsAnnual
Pension
Expense		CashOCI - Prior Service CostOCI - Gain/LossPension
Asset/
Liability		Projected
Benefit
Obligation		Plan
Assets		  
Balance, Jan. 1, 2012         
(a) Service cost         
(b) Interest cost         
(c) Actual return         
(d) Contributions         
(e) Benefits         
Journal entry, 12/31/12         
Accum OCI, 12/31/11         
Balance, Dec. 31, 2012         
(f) Additional PSC         
January 1, 2013         
(g) Service cost         
(h) Interest cost         
(i) Actual return         
(j) Unexpected loss         
(k) Amortization of PSC         
(l) Contributions         
(m) Benefits         
Journal entry, 12/31/13         
Accum OCI, 12/31/12        
Balance, Dec. 31, 2013        
   
Area for calculations as desired  
   
   
  
   
(b) For 2013, prepare the journal entry to record pension-related amounts.  

 

 

                 
Name:    Date:      
Instructor:    Course:      
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.  
   
Allison Co.  
Pension Worksheet—2012 and 2013  
 General Journal Entries Memo Record 
ItemsAnnual
Expense		DR/CRCashDR/CROCI - Prior Service CostDR/CROCI - Gain/LossDR/CRPension
Asset/
Liability		DR/CRAccum Projected Benefit ObligationDR/CRPlan
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 Income       XXXXX      
  Other comprehensive income (loss)           
        0        
        0        
        0 0      
  Comprehensive Income     XXXXX      
                 
  Balance Sheet             
   Liabilities            
          0      
                 
   Stockholder's Equity           
          0      
          0      
                 
                 
   
      
       
       
  

 

 

 

    
       
   
           
  • 12 years ago
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