Prepare a pension worksheet presenting both years

Reference no: EM132027261

Question: Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2012 and 2013. 2012 2013 Projected benefit obligation, January 1 $600,000 Plan assets (fair value and market-related value), January 1 410,000 Pension asset/liability, January 1 190,000 Cr. 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 50,000 Annual contributions 97,000 81,000 Benefi ts paid retirees 31,500 54,000 Increase in projected benefi t obligation due to changes in actuarial assumptions 87,000 ?0? Accumulated benefit obligation at December 31 721,800 789,000 Average service life of all employees 20 years Vested benefi t obligation at December 31 464,000 Instructions

(a) Prepare a pension worksheet presenting both years 2012 and 2013 and accompanying computations and amortization of the loss (2013) 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.

Reference no: EM132027261

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