Headland Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $201,400; projected benefit obligation $245,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021 Annual service cost $15,800 $19,400 $26,100 Settlement rate and expected rate of return 10 % 10 % 10 % Actual return on plan assets 18,000 22,150 24,000 Annual funding (contributions) 15,800 40,000 47,500 Benefits paid 13,700 16,500 20,800 Prior service cost (plan amended, 1/1/20) 160,000 Amortization of prior service cost 53,800 41,700 Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 522,200
Headland Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $201,400; projected benefit obligation $245,000. Other data relating to 3 years’ operation of the plan are as follows. 2019 2020 2021 Annual service cost $15,800 $19,400 $26,100 Settlement rate and expected rate of return 10 % 10 % 10 % Actual return on plan assets 18,000 22,150 24,000 Annual funding (contributions) 15,800 40,000 47,500 Benefits paid 13,700 16,500 20,800 Prior service cost (plan amended, 1/1/20) 160,000 Amortization of prior service cost 53,800 41,700 Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: 522,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Headland Company adopts acceptable accounting for its defined benefit pension plan on January 1, 2019, with the following beginning balances: plan assets $201,400; projected benefit obligation $245,000. Other data relating to 3 years’ operation of the plan are as follows.
|
2019
|
2020
|
2021
|
|||||||
| Annual service cost | $15,800 | $19,400 | $26,100 | ||||||
| Settlement rate and expected |
10 | % | 10 | % | 10 | % | |||
| Actual return on plan assets | 18,000 | 22,150 | 24,000 | ||||||
| Annual funding (contributions) | 15,800 | 40,000 | 47,500 | ||||||
| Benefits paid | 13,700 | 16,500 | 20,800 | ||||||
| Prior service cost (plan amended, 1/1/20) | 160,000 | ||||||||
| Amortization of prior service cost | 53,800 | 41,700 | |||||||
| Change in actuarial assumptions establishes a December 31, 2021, projected benefit obligation of: |
522,200 |
Prepare a pension worksheet presenting all 3 years’ pension balances and activities. (Enter all amounts as positive.)
|
Annual Pension
Expense |
Cash
|
OCI—Prior
Service Cost |
OCI—Gain/
Loss |
Pension Asset/
Liability |
Projected Benefit
Obligation |
Plan
Assets |
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