P19.8 (LO 2, 4, 5) Groupwork (Comprehensive 2-Year Worksheet) Lemke SA sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2025 and 2026.

2025 2026 Defined benefit obligation, January 1 R600,000 Plan assets (fair value), January 1 410,000 Pension asset/liability, January 1 190,000 Cr.

Service cost 40,000 R 59,000 Discount (interest) rate 10% 10%

Actual return on plan assets 36,000 61,000 Annual contributions 97,000 81,000 Benefits paid retirees 31,500 54,000 Increase in defined benefit obligation due to changes in actuarial assumptions 87,000 –0–

Accumulated benefit obligation at December 31 721,800 789,000 Vested benefit obligation at December 31 464,000 Instructions

a. Prepare a pension worksheet for both 2025 and 2026.

b. Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year.

c. For 2026, indicate the pension amounts reported in the financial statements.