Acct557 Wk3 Hw

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

Items "Annual

Expense" DR/CR Cash DR/CR OCI - Prior Service Cost DR/CR OCI - Gain/Loss DR/CR "Pension

Asset/

Liability" DR/CR Accum Projected Benefit Obligation DR/CR "Plan

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...