Elton Co. has the following postretirement benefit plan balances on January 1, 2025.

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2026, the company amends the plan so that prior service costs of $175,000 are created. Other data related to the plan are as follows.

Instructions

a. Prepare a worksheet for the postretirement plan in 2025.

b. Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2025.

c. Prepare a worksheet for 2026 and any journal entries related to the postretirement plan as of December 31, 2026.

d. Indicate the postretirement-benefit–related amounts reported in the 2026 financial statements.

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Accumulated postretirement benefit obligation Fair value of plan assets $2,250,000 2,250,000