P20-8 (Comprehensive 2-Year Worksheet) Glesen Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2008 and 2009. 2008 2009 Projected benefit obligation, January 1 $650,000 Plan assets (fair value and market related value), January 1 410,000 Prepaid/accrued pension cost (credit), January 1 80,000 Additional pension liability, January 1 12,300 Intangible asset-deferred pension cost, January 1 12,300 Unrecognized prior service cost, January 1 160,000 Service cost 40,000 $ 59,000 Settlement rate 10% 10% Expected rate of return 10% 10% Actual return on plan assets 36,000 61,000 Amortization of prior service cost 70,000 55,000 Annual contributions 72,000 81,000 Benefits paid retirees 31,500 54,000 Increase in projected benefit obligation due to changes in actuarial assumptions 87,000 ?0? Accumulated benefit obligation at December 31 721,800 789,000 Average service life of all employees 20 years Vested benefit obligation at December 31 464,000 Instructions (a) Prepare a pension worksheet presenting both years 2008 and 2009 and accompanying computations including the computation of the minimum liability (2008 and 2009) and amortization of the unrecognized loss (2009) using the corridor approach. (b) Prepare the journal entries (from the worksheet) to reflect all pension plan transactions and events at December 31 of each year. (c) At December 31, 2009, prepare a schedule reconciling the funded status of the pension plan with the pension amounts reported in the financial statements.
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