Exercise 20-16

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The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.

Incurred during the Year	(Gain) or Loss
2014	$309,500
2015	481,300
2016	(224,400)
2017	(292,200)

Other information about the companys pension obligation and plan assets is as follows.

As of January 1,	Projected Benefit Obligation	Plan Assets (market-related asset value)
2014	$4,005,400	$2,405,700
2015	4,525,900	2,208,900
2016	5,009,800	2,603,400
2017	4,247,000	3,043,200

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 is4,400. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2014. 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 2014, 2015, 2016, and 2017. Apply the corridor approach in determining the amount to be amortized each year.(Round answers to 0 decimal places, e.g. 2,500.)

Year	Minimum Amortization of (Gain) Loss
2014	$
2015	$
2016	$
2017	$

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4/17/2016 Exercise 208 Print by: Sasha Cortes FULC162_ACCT201_21847: SP2016 21847 ACCT 201BFHY1 Intermediate Accounting / Ch. 20 HW *Exercise 208 Your answer is partially correct. Try again. Kenseth Corp. has the following beginningoftheyear present values for its projected benefit obligation and marketrelated values for its pension plan assets. Projected Benefit Obligation Plan Assets Value 2013 $6,544,000 $6,216,800 2014 7,852,800 8,180,000 2015 9,652,400 8,507,200 2016 11,779,200 9,816,000 The average remaining service life per employee in 2013 and 2014 is 10 years and in 2015 and 2016 is 12 years. The net gain or loss that occurred during each year is as follows: 2013, $916,160 loss 2014, $294,480 loss 2015, $35,992 loss and 2016, $81,800 gain. Using the corridor approach, compute the amount of net gain or loss amortized and charged to pension expense in each of the four years, setting up an appropriate schedule. Year Minimum Amortization of Loss 2013 $0 2014 $ 9816 2015 2016 $ $ 19,668 3,305 Question Attempts: 3 of 5 used Copyright 20002016 by John Wiley & Sons, Inc. or related companies. All rights reserved. http://edugen.wileyplus.com/edugen/shared/assignment/test/qprint.uni 1/1