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    Two-year work sheet and reconciliation schedule

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    On January 1, 2007, Eastern Company has the following defined benefit pension plan balances.
    Projected benefits obligation $6,750,000
    Fair value of plan assets 6,300,000

    The interest (settlement) rate applicable to the plan is 10% On January 1, 2008, the company amends its pension agreement
    so that service costs of $750,000 are created. Other data related to the pension plan are as follows:

    2007 2008
    Service costs $225,000 $270,000
    Prior service costs amortization 0 135,000
    Contributions (funding) to the plan 360,000 427,500
    Benefits paid 300,000 420,000
    Actual return on plan assets 378,000 390,000
    Expected rate of return on assets 6% 8%

    Instructions:
    (a) Prepare a pension work sheet for the pension plan for 2007 and 2008.

    Eastern Company
    Pension Work Sheet?2007 and 2008
    General Journal Entries Memo Record
    Items "Annual
    Pension
    Expense" Cash OCI - Prior Service Cost OCI - Gain/Loss "Pension
    Asset/
    Liability" "Projected
    Benefit
    Obligation" "Plan
    Assets"
    Balance, Jan. 1, 2007 (450,000) (6,750,000) Amount
    (a) Service cost 225,000 Amount
    (b) Interest cost 675,000 (675,000)
    (c) Actual return (378,000) Amount
    (d) Contributions (360,000) Amount
    (e) Benefits Amount Amount
    Journal entry, 12/31/07 522,000 (360,000) 0 0 (162,000)
    Accum OCI, 12/31/06
    Balance, Dec. 31, 2007 Formula Formula Formula
    (f) Additional PSC Amount Amount
    January 1, 2008 Formula
    (g) Service cost Amount Amount
    (h) Interest cost Amount Formula
    (i) Actual return Amount Amount
    (j) Unexpected loss Amount Amount
    (k) Amortization of PSC Amount Amount
    (l) Contributions Amount Amount
    (m) Benefits Amount Amount
    Journal entry, 12/31/08 Formula Formula Formula Formula Formula
    Accum OCI, 12/31/07 0 0
    Balance, Dec. 31, 2008 Formula Formula Formula Formula Formula

    Area for calculations as desired
    Area for calculations as desired
    Area for calculations as desired

    (b) For 2008, prepare the journal entry to record pension-related amounts.
    Pension Expense Amount
    Account title Amount
    Account title Amount
    Account title Amount
    Account title Amount.

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    https://brainmass.com/business/business-management/year-work-sheet-reconciliation-schedule-437055

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    On January 1, 2007, Eastern Company has the following defined benefit pension plan balances.
    Projected benefits obligation $6,750,000
    Fair value of plan assets 6,300,000

    The interest (settlement) rate applicable to the plan is 10% On January 1, 2008, the company amends its pension agreement
    so that service costs of $750,000 are created. Other data related to the pension plan are as follows:

    2007 2008
    Service costs $225,000 $270,000
    Prior service costs amortization 0 135,000 ...

    Solution Summary

    The solution provides a two-year work sheet and reconciliation schedule.

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