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    Mount Co: Prepare pension worksheets and journal entries

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    Mount Co. has the following defined-benefit pension plan balances on January 1, 2008.
    Projected Benefit Obligation - 4,500,000
    Fair value of plan assets - 4,500,000

    The interest (settlement) rate applicable to the plan is 10%. On January 1, 2009, the company amends its pension agreement so that prior service costs of $600,000 are created. Other data related to the pension plan are as follows.

    2008
    Service costs - 150,000
    Prior service costs amortization - 0
    Contributions (funding) to the plan - 150,000
    Benefits paid - 220,000
    Actual return on plan assets - 252,000
    Expected rate of return on assets - 6%

    2009
    Service costs - 170,000
    Prior service costs amortization - 90,000
    Contributions (funding) to the plan - 184,658
    Benefits paid - 280,000
    Actual return on plan assets - 250,000
    Expected rate of return on assets - 8%

    A - Prepare a pension worksheet for the pension plan in 2008.
    B - Prepare any journal entry(ies) related to the pension plan that would be needed at December 31,2008.
    C - Prepare a pension worksheet for 2009 and any journal entry(ies) related to the pension plan as of December, 31, 2009.
    D - Indicate the pension-related amounts reported in the 2009 financial statements.

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    https://brainmass.com/business/the-accounting-cycle/mount-prepare-pension-worksheets-journal-entries-430443

    Solution Summary

    The expert prepares pension worksheets and journal entries for Mount Co.

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