Question

Presented below is partial information related to Jean Burr Company at December 31, 2010.
Defined benefit obligation................................................................£930,000
Plan assets (at fair value) ...................................................................700,000
Vested benefits...................................................................................200,000
Past service cost not yet recognized in pension expense....................120,000
Gains and losses –0–

Instructions
(a) Present the schedule reconciling the funded status with the pension asset/liability reported on the statement of financial position. Assume no asset or liability existed at the beginning of period for pensions on Jean Burr Company’s statement of financial position.
(b) Assume the same facts as in (a) except that Jean Burr Company has an unrecognized loss of $16,000 during 2010.
(c) Explain the rationale for the treatment of the unrecognized loss and the past service cost not yet recognized in pension expense.



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  • CreatedJune 17, 2013
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