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The following defined pension data of Doreen Corp. apply to

E20-7 (Basic Pension Worksheet)

The following defined pension data of Doreen Corp. apply to the year 2008.

Projected benefit obligation, 1/1/08 (before amendment) $560,000
Plan assets, 1/1/08 546,200
Prepaid/accrued pension cost (credit) 13,800
On January 1, 2008, Doreen Corp., through plan amendment,
grants prior service benefits having a present value of 100,000
Settlement rate 9%
Service cost 58,000
Contributions (funding) 55,000
Actual (expected) return on plan assets 52,280
Benefits paid to retirees 40,000
Prior service cost amortization for 2008 17,000

Instructions

For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

Solution Preview

The following defined pension data of Doreen Corp. apply to the year 2008.

Projected benefit obligation, 1/1/08 (before amendment) $560,000
Plan assets, 1/1/08 ...

Solution Summary

The following defined pension data of Doreen Corp. apply to the year 2008.

Projected benefit obligation, 1/1/08 (before amendment) $560,000
Plan assets, 1/1/08 546,200
Prepaid/accrued pension cost (credit) 13,800
On January 1, 2008, Doreen Corp., through plan amendment,
grants prior service benefits having a present value of 100,000
Settlement rate 9%
Service cost 58,000
Contributions (funding) 55,000
Actual (expected) return on plan assets 52,280
Benefits paid to retirees 40,000
Prior service cost amortization for 2008 17,000

Instructions

For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

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