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Prepare the journal entry to reflect the accounting

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Reference no: EM132467392

Howard Corp. sponsors a defined-benefit pension plan for its employees. On January 1, 2011, the following balances related to this plan.

Plan assets (market-related value)                $500,000

Projected benefit obligation                           600,000

OCI - Prior service cost                                 75,000

OCI - Loss                                                  70,000

As a result of the operation of the plan during 2011, the actuary provided the following additional data at December 31, 2011.

Service cost for 2011                                $ 75,000

Actual return on plan assets in 2011              45,000

Amortization of prior service cost                 20,000

Contributions in 2011                                115,000

Benefits paid retirees in 2011                       70,000

Interest rate                                                   7%

Expected return rate                                       10%

Average remaining service life of active employees 10 years

Instructions

Question (a) Using the above information to complete the pension work sheet for 2011 . Indicate (credit) entries by parentheses.

Question (b) Prepare the journal entry to reflect the accounting for the company's pension plan for the year ending December 31, 2011.

Reference no: EM132467392

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