In: Accounting
P20.1 (LO2,4,5) (2-Year Worksheet) On January I, 2019, Harrington SA has the following defined benefit pension' plan balances.
Defined Benefit Obligation €4,500,000
Fair Value of plan assets 4,200,000
The interest rate applicable to the plan is 10%. On January 1, 2020, the company amends its pension agreement so that past service costs of €500,000 are created. Other data related to the pension plan are as follows.
2019 | 2020 | |
Service Cost | 150,000 | 180,000 |
Contributions to the plan | 240,000 | 285,000 |
Benefits paid | 200,000 | 280,000 |
Actual Return on plan assets | 420,000 | 260,000 |
Instructions
a. Prepare a pension worksheet for the pension plan for 2019 and 2020.
b. For 2020, prepare the journal entry to record pension-related amounts.