Problem 3. Accounting for pension (20 points)

Presented below is information related to Jones Department Stores, Inc. pension plan for 2015.

Projected benefit obligation, Jan 1, 2015 (before amendment)470,000

Fair value of plan assets, Jan 1, 2014360,000

On Jan 1, 2015, Jones through plan amendment, grants prior service

Benefits having a present value of100,000

Service cost54,000

Settlement rate10%

Actual and expected return on plan assets32,400

Amortization of prior service cost (due to benefit increase)10,000

Funding contribution for 2015480,000

Benefits paid to retirees240,000

Instructions

Prepare a pension worksheet for Jones Department Stores that shows the journal entry for pension expense and the year-end balances in the related pension accounts. Please indicate Dr. and Cr. (or + and -) when entering each number