(Comprehensive 2-Year Worksheet) Hobbs Co. has the following defined-benefit pension plan balances on January 1, 2010.
Projected benefit obligation$4,600,000
Fair value of plan assets 4,600,000
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2011, the company amends its pension agreement so that prior service costs of $600,000 are created. Other data related to the pension plan are:
(a) Prepare a pension worksheet for the pension plan in 2010.
(b) Prepare any journal entries related to the pension plan that would be needed at December 31, 2010.
(c) Prepare a pension worksheet for 2011 and any journal entries related to the pension plan as of December 31, 2011.
(d) Indicate the pension-related amounts reported in the 2011 financialstatements.