Problem - On January 1, 2013, Laura's Living Company has the following defined benefit pension plan balances.
Projected benefit obligation $5,700,000
Fair value of plan assets 7,200,000
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2014, the company amends its pension agreement so that service costs of $350,000 are created. Other data related to the pension plan are as follows.
2013 2014
Service costs $150,000 $165,000
Prior service costs amortization $0 $63,000
Contributions (funding) to the plan $168,000 $194,000
Benefits paid $190,000 $220,000
Actual return on plan assets $576,000 $498,000
Expected rate of return on assets 8% 7%
Required: Prepare a pension worksheet for the pension plan for 2013 and 2014.