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    Pension worksheet, journal entries for defined benefit pension plan

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    (Comprehensive 2-Year Worksheet) Glesen Company sponsors a defined benefit pension plan
    for its employees. The following data relate to the operation of the plan for the years 2008 and 2009.

    2008 2009
    Projected benefit obligation, January 1 $650,000
    Plan assets (fair value and market related value), January 1 410,000
    Prepaid/accrued pension cost (credit), January 1 80,000
    Additional pension liability, January 1 12,300
    Intangible asset-deferred pension cost, January 1 12,300
    Unrecognized prior service cost, January 1 160,000
    Service cost 40,000 $ 59,000
    Settlement rate 10% 10%
    Expected rate of return 10% 10%
    Actual return on plan assets 36,000 61,000
    Amortization of prior service cost 70,000 55,000
    Annual contributions 72,000 81,000
    Benefits paid retirees 31,500 54,000
    Increase in projected benefit obligation due to
    changes in actuarial assumptions 87,000
    Accumulated benefit obligation at December 31 721,800 789,000
    Average service life of all employees 20 years
    Vested benefit obligation at December 31 464,000

    Instructions

    (a) Prepare a pension worksheet presenting both years 2008 and 2009 and accompanying computations
    including the computation of the minimum liability (2008 and 2009) and amortization of the
    unrecognized loss (2009) using the corridor approach.
    (b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events
    at December 31 of each year.
    (c) At December 31, 2009, prepare a schedule reconciling the funded status of the pension plan with
    the pension amounts reported in the financial statements.

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    https://brainmass.com/business/the-accounting-cycle/pension-worksheet-journal-entries-defined-benefit-pension-418580

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    The expert prepares a pension plan worksheet and journal entries for defined benefit pension plans.

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