Headland Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2020 and 2021.
2020
2021
Projected benefit obligation, January 1 $604,400
Plan assets (fair value and market-related value), January 1 413,300
Pension asset/liability, January 1 191,100 Cr.
Prior service cost, January 1 159,200
Service cost 40,000 $58,500
Settlement rate 10 % 10 %
Expected rate of return 10 % 10 %
Actual return on plan assets 36,000 61,600
Amortization of prior service cost 69,300 50,000
Annual contributions 96,700 81,400
Benefits paid retirees 31,600 54,040
Increase in projected benefit obligation due to changes in actuarial assumptions 86,300 0
Accumulated benefit obligation at December 31 722,000 792,600
Average service life of all employees 20 years
Vested benefit obligation at December 31
465,900
1.Prepare a pension worksheet presenting both years 2020 and 2021.
2.
Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.
3. For 2021, indicate the pension amounts reported in the financial statements.
Answers: 1
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Headland Company sponsors a defined benefit pension plan for its employees. The following data relat...
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