| P20-1 (2-Year Worksheet) On January 1, 2014, Harrington Company has the following defined benefit pension plan balances. |
|
Projected benefits obligation |
$4,500,000 |
|
|
Fair value of plan assets |
4,200,000 |
|
|
| The interest (settlement) rate applicable to the plan is |
10% |
On January 1, 2015, the company amends its pension |
| agreement so that service costs of |
$500,000 |
are created. Other data related to the pension plan are as follows: |
|
|
2014 |
2015 |
|
|
Service costs |
$150,000 |
$180,000 |
|
|
Prior service costs amortization |
0 |
90,000 |
|
|
Contributions (funding) to the plan |
240,000 |
285,000 |
|
|
Benefits paid |
200,000 |
280,000 |
|
|
Actual return on plan assets |
252,000 |
260,000 |
|
|
Expected rate of return on assets |
6% |
8% |
|
|
| Instructions: |
| (a) Prepare a pension worksheet for the pension plan for 2014 and 2015. |
(b) For 2015, prepare the journal entry to record pension-related amounts.