The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses Incurred
Question:
The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses
Incurred during the Year | (Gain) or Loss | ||
---|---|---|---|
2020 | $300,000 | ||
2021 | 480,000 | ||
2022 | (210,000) | ||
2023 | (290,000) |
Other information about the company’s pension obligation and plan assets is as follows.
As of January 1, | Projected Benefit | Plan Assets | ||
---|---|---|---|---|
2020 | $4,000,000 | $2,400,000 | ||
2021 | 4,520,000 | 2,200,000 | ||
2022 | 5,000,000 | 2,600,000 | ||
2023 | 4,240,000 | 3,040,000 |
Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2020. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.
Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2020, 2021, 2022, and 2023. Apply the “corridor” approach in determining the amount to be amortized each year.
Year | Minimum Amortization of (Gain) Loss | |
---|---|---|
2020 | ||
2021 | ||
2022 | ||
2023 |
Intermediate Accounting
ISBN: 978-1118742976
16th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield