Keeton Company sponsors a defined benefit pension plan for its 600 employees. The Company's actuary provided the following information about the plan. January 1, 2014 December 31, 2014 December 31, 2015 Projected Benefit Obligation $2,800,000 $3,650,000 $4,195,000 Accumulated Benefit Obligation $1,900,000 $2,430,000 $2,900,000 Plan Assets (fair value and market-related asset value) $-0- $198,000 ($24,000) Discount Rate (current settlement rate) 9% 8% Actual and expected asset return rate 10% 10% Contributions $1,030,000 $600,000 The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $400,000 in 2014 and $475,000 in 2015. The accumulated OCI (PSC) on January 1, 2014, was $1,260,000. No benefits have been paid. 

Instructions 

a. Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2014 and 2015. 

b. Prepare a schedule that reflects the amount of accumulated OCI (G/L) to be amortized as a component of pension expense for 2014 and 2015. 

c. Determine the total amount of pension expense to be recognized by Keeton Company in 2014 and 2015.

Answer rating: 100% (QA)

Solution a Prior Service cost PSC Amortization c Pension expense for 2014 is composed of the followi... View the full answer