Elton Co. has the following postretirement benefit plan balances on January 1, 2014.\nAccumulated postretirement benefi t obligation $2,250,000 Fair va
Elton Co. has the following postretirement benefit plan balances on January 1, 2014.
\r\nAccumulated postretirement benefi t obligation $2,250,000 Fair value of plan assets 2,250,000
\r\nThe interest (settlement) rate applicable to the plan is 10%. On January 1, 2015, the company amends the plan so that prior service costs of $175,000 are created. Other data related to the plan are: 2014 2015
\r\nService costs $ 75,000 $ 85,000
\r\nPrior service costs amortization –0– 12,000
\r\nContributions (funding) to the plan 45,000 35,000
\r\nBenefi ts paid 40,000 45,000
\r\nActual return on plan assets 140,000 120,000
\r\nExpected rate of return on assets 8% 6%
\r\nInstructions
\r\n(a) Prepare a worksheet for the postretirement plan in 2014.
\r\n(b) Prepare any journal entries related to the postretirement plan that would be needed at December 31, 2014.
\r\n(c) Prepare a worksheet for 2015 and any journal entries related to the postretirement plan as of December 31, 2015.
\r\n(d) Indicate the postretirement-benefit–related amounts reported in the 2015 financial statements.