Journal Entries of Pension Plans
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#7 The accountant for xyz Corporation has developed the following information for the company's defined-benefit pension plan for 2008:
Service cost $500,000
Actual return on plan assets 260,000
Annual contribution to the plan 900,000
Amortization of unrecognized prior service cost 105,000
Benefits paid to retirees 60,000
Settlement rate 10%
Expected rate of return on plan assets 8%
The accumulated benefit obligation at December 31, 2008, amounted to $4,250,000.
Instructions
(a) Using the above information for xyz Corporation, complete the attached Pension Work Sheet for 2008. Indicate (credit) entries by parentheses. Calculated amounts should be supported; i.e. (show calculations)
(b) Prepare the journal entries to reflect the accounting for the company's pension plan for the year ending December 31, 2008.
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Solution Summary
The solution explains how to complete the pension worksheet and prepare the journal entries
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