Years$-of-$Future$-$Service Amortization

$At$ the beginning $of2019,$ Brent Company amended its defined benefit pension plan. The amendment entitled five active participating employees $to$ receive increased future benefits based $on$ their prior service. Brent's actuary determined that the prior service cost for this amendment amounts $to$ $$330,000.$ Employee $Ais$ expected $to$ retire after $1$ year, employee $B$ after $2,$ employee $C$ after $3,$ employee $D$ after $4,$ and employee $E$ after $5$ years.

Required:

Question Content Area

$1.$ Using the years$-of-$future$-$service method, prepare a set $of$ schedules $to$ determine the amortization fraction for each year. Enter the amortization fraction $as$ a fraction. For example:$\frac{3}{10.}$

BRENT COMPANY

Amortization Fractions

$2019-2023$

Expected

Years $of$

Future Service Number $of$

Service Years

Rendered $in2019$ Number $of$

Service Years

Rendered $in2020$ Number $of$

Service Years

Rendered $in2021$ Number $of$

Service Years

Rendered $in2022$ Number $of$

Service Years

Rendered $in2023$

A fill $in$ the blank $151ea40dd{053058}_1$

$1$

fill $in$ the blank $151ea40dd{053058}_2$

$1$

$B$ fill $in$ the blank $151ea40dd{053058}_3$

$2$

fill $in$ the blank $151ea40dd{053058}_4$

$1$

fill $in$ the blank $151ea40dd{053058}_5$

$1$

$C$ fill $in$ the blank $151ea40dd{053058}_6$

$3$

fill $in$ the blank $151ea40dd{053058}_7$

$1$

fill $in$ the blank $151ea40dd{053058}_8$

$1$

fill $in$ the blank $151ea40dd{053058}_9$

$1$

$D$ fill $in$ the blank $151ea40dd{053058}_{10}$

$4$

fill $in$ the blank $151ea40dd{053058}_{11}$

$1$

fill $in$ the blank $151ea40dd{053058}_{12}$

$1$

fill $in$ the blank $151ea40dd{053058}_{13}$

$1$

fill $in$ the blank $151ea40dd{053058}_{14}$

$1$

$E$ fill $in$ the blank $151ea40dd{053058}_{15}$

$5$

fill $in$ the blank $151ea40dd{053058}_{16}$

$1$

fill $in$ the blank $151ea40dd{053058}_{17}$

$1$

fill $in$ the blank $151ea40dd{053058}_{18}$

$1$

fill $in$ the blank $151ea40dd{053058}_{19}$

$1$

fill $in$ the blank $151ea40dd{053058}_{20}$

$1$

Total fill $in$ the blank $151ea40dd{053058}_{21}$

$5$

fill $in$ the blank $151ea40dd{053058}_{22}$

$4$

fill $in$ the blank $151ea40dd{053058}_{23}$

$3$

fill $in$ the blank $151ea40dd{053058}_{24}$

$2$

fill $in$ the blank $151ea40dd{053058}_{25}$

$1$

Amortization fraction

$\frac{5}{15}$

$\frac{4}{15}$

$\frac{3}{15}$

$\frac{2}{15}$

$\frac{1}{15}$

Feedback Area

Feedback

While the straight$-$line amortization method $is$ allowed, another method $of$ calculating the amount $of$ the amortization $of$ prior service cost exists. This preferred method $(years-of-$future$-$service method$)$ focuses $on$ assigning $an$ amount $to$ each future service period for each active participating employee who $is$ expected $to$ receive future benefits under the plan.

Question Content Area

$2.$ Using the years$-of-$future$-$service method, prepare a set $of$ schedules $to$ determine the amortization $of$ the prior service cost. Enter amounts $as$ positive numbers.

BRENT COMPANY

Prior Service Cost Amortization

$2019-2023$

Total

Prior Service

Cost

Amortization

Fraction Amortization

$to$ Increase

Pension Expense Remaining

Prior Service

Cost

$2019$ $$\frac{5}{15}$

$330,000$

$\frac{5}{15}$

$$\frac{5}{15}$

$110,000$

$$\frac{5}{15}$

$220,000$

$2020\frac{4}{15}$

$220,000$

$\frac{4}{15}$

$\frac{4}{15}$

$88,000$

$\frac{4}{15}$

$132,000$

$2021\frac{3}{15}$

$132,000$

$\frac{3}{15}$

$\frac{3}{15}$

$66,000$