(Comprehensive 2-Year Worksheet) Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018.Check the below image for pension plan information.Instructions(a) Prepare a pension worksheet presenting both years 2017 and 2018 and accompanying computations and amortization of the loss (2018) 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) For 2018, indicate the pension amounts reported in the financial statements. 20172018Projected benefit obligation, January 1Plan assets (fair value and market-related value), January 1Pension asset/liability, January 1Prior service cost, January 1$600,000410,000190,000 Cr.160,000$ 59,00010%Service cost40,00010%Settlement rateExpected rate of returnActual return on plan assetsAmortization of prior service costAnnual contributions10%10%61,00050,00036,00070,00097,00031,50081,00054,000Benefits paid retireesIncrease in projected benefit obligation due tochanges in actuarial assumptionsAccumulated benefit obligation at December 31Average service life of all employeesVested benefit obligation at December 31-0-87,000721,800789,00020 years464,000

Pension means the retirement benefit fund to employees of the organisation after their retirement.…

Answered: 2017 2018 Projected benefit obligation,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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(Comprehensive 2-Year Worksheet) Lemke Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2017 and 2018.

Check the below image for pension plan information.

Instructions
(a) Prepare a pension worksheet presenting both years 2017 and 2018 and accompanying computations and amortization of the loss (2018) 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) For 2018, indicate the pension amounts reported in the financial statements.

2017
2018
Projected benefit obligation, January 1
Plan assets (fair value and market-related value), January 1
Pension asset/liability, January 1
Prior service cost, January 1
$600,000
410,000
190,000 Cr.
160,000
$ 59,000
10%
Service cost
40,000
10%
Settlement rate
Expected rate of return
Actual return on plan assets
Amortization of prior service cost
Annual contributions
10%
10%
61,000
50,000
36,000
70,000
97,000
31,500
81,000
54,000
Benefits paid retirees
Increase in projected benefit obligation due to
changes in actuarial assumptions
Accumulated benefit obligation at December 31
Average service life of all employees
Vested benefit obligation at December 31
-0-
87,000
721,800
789,000
20 years
464,000

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