On January 1, 2014, Harrington Company has the following defined benefit pension plan balances.

Projected benefit obligation $4,500,000
Fair value of plan assets $4,200,000
The interest (settlement) rate applicable to the plan is 10%. On January 1, 2015, the company amends its pension agreement so that prior service costs of $500,000 are created. Other data related to the pension plan are as follows.

2014 2015
Service cost $150,000 $180,000
Prior service cost amortization -0- 90,000
Contributions (funding) to the plan 240,000 285,000
Benefits paid 200,000 280,000
Actual return on plan assets 252,000 260,000
Expected rate of return on assets 6% 8%
Instructions

(a) Prepare a pension worksheet for the pension plan for 2014 and 2015.

(b) For 2015, prepare the journal entry to record pension-related amounts.

Answer and Explanation:

a. The pension worksheet for the pension plan for the year 2014 and 2015 is presented on the excel spreadsheet

b. According to the scenario, The journal entry is

Journal Entry:-

Pension expenses A/c      Dr. $450,640

Other comprehensive income (gain/loss) A/c  Dr. $99,360

Other comprehensive income (prior service cost) A/c  Dr. $410,000

To pension assets & liabilities A/c      $675,000

To Cash A/c        $285,000

(Being the pension expense is recorded)  

For recording this we debited the pension expense, other income, gain or loss as it increased the expenses reduced the income and credited the cash and assets and liabilities because it reduced the cash and recognize the pension assets and liabilities

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'