The following data relate to the operation of Kramer Co.s pension plan in 2013. The pension worksheet
Question:
The following data relate to the operation of Kramer Co.’s pension plan in 2013. The pension worksheet for 2012 is provided in P20-10.
Service cost $59,000
Actual return on plan assets 32,000
Amortization of prior service cost 28,000
Annual contributions 51,000
Benefits paid retirees 27,000
Average service life of all employees 25 years
For 2013, Kramer will use the same assumptions as 2012 for the expected rate of returns on plan assets. The settlement rate for 2013 is 10%.
Instructions
(a) Prepare a pension worksheet for 2013 and accompanying computations and amortization of the loss, if any, in 2013 using the corridor approach.
(b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31.
(c) Indicate the pension amounts reported in the financial statements.
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