Question

On January 1, 2017, Sweet Company has the following defined benefit pension plan balances.

Projected benefit obligation		$4,460,000
Fair value of plan assets		4,150,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2018, the company amends its pension agreement so that prior service costs of $503,000 are created. Other data related to the pension plan are as follows.

		2017			2018
Service cost		$150,000			$182,000
Prior service cost amortization		0			92,000
Contributions (funding) to the plan		243,000			279,000
Benefits paid		199,000			278,000
Actual return on plan assets		249,000			257,000
Expected rate of return on assets		6	%		8	%

A.)

Prepare a pension worksheet for the pension plan for 2017 and 2018. (Enter all amounts as positive.)

B.)

For 2018, prepare the journal entry to record pension-related amounts.

Answer 1

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