Assignment:
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The accountant for ABC co. has developed the following information for the company's defined -pension plan for 2008:
Beginning PBO $3,750,000
Beginning FMV of assets $2,750,000
Pension Liability $1,000,000
AOCI - unrecognized PSC $625,000
Service cost $500,000
Actual return on plant assets $260,000
Annual contribution to the plan $900,000
Amortization of prior services cost $105,000
Benefits paid to retirees $60,000
Settlement rate 10%
Expected rate of return on plan assets 8%
The Accumulated benefit obligation at December31, 2008 amounted to $4,250,000.
Instructions:
a) Using the above information for ABC co., prepare a pension work sheet for 2008.
Indicate (credit) entries by parentheses. Calculated amounts should be supported.
b) Prepare the journal entries to reflect the accounting for the company's pension plan for the year ending December 31, 2008