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    The following defined pension data of Doreen Corp. apply to

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    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.

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    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.

    $2.19