Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below: ($ in thousands) Case 1 Case 2 Case 3 Net loss (gain)—AOCI, Jan. 1 $ 337 $ (407 ) $ 297 2021 loss (gain) on plan assets (28 ) (25 ) 5 2021 loss (gain) on PBO (40 ) 33 (301 ) Accumulated benefit obligation, Jan. 1 (3,120 ) (2,720 ) (1,620 ) Projected benefit obligation, Jan. 1 (3,480 ) (2,840 ) (1,870 ) Fair value of plan assets, Jan. 1 2,970 2,870 1,720 Average remaining service period of active employees (years) 12 15 10 Required: 1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021. 2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.
Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below: ($ in thousands) Case 1 Case 2 Case 3 Net loss (gain)—AOCI, Jan. 1 $ 337 $ (407 ) $ 297 2021 loss (gain) on plan assets (28 ) (25 ) 5 2021 loss (gain) on PBO (40 ) 33 (301 ) Accumulated benefit obligation, Jan. 1 (3,120 ) (2,720 ) (1,620 ) Projected benefit obligation, Jan. 1 (3,480 ) (2,840 ) (1,870 ) Fair value of plan assets, Jan. 1 2,970 2,870 1,720 Average remaining service period of active employees (years) 12 15 10 Required: 1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021. 2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 4E
Related questions
Question
Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below:
| ($ in thousands) | |||||||||
| Case 1 | Case 2 | Case 3 | |||||||
| Net loss (gain)—AOCI, Jan. 1 | $ | 337 | $ | (407 | ) | $ | 297 | ||
| 2021 loss (gain) on plan assets | (28 | ) | (25 | ) | 5 | ||||
| 2021 loss (gain) on PBO | (40 | ) | 33 | (301 | ) | ||||
| Accumulated benefit obligation, Jan. 1 | (3,120 | ) | (2,720 | ) | (1,620 | ) | |||
| Projected benefit obligation, Jan. 1 | (3,480 | ) | (2,840 | ) | (1,870 | ) | |||
| Fair value of plan assets, Jan. 1 | 2,970 | 2,870 | 1,720 | ||||||
| Average remaining service period of active employees (years) |
12 | 15 | 10 | ||||||
Required:
1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021.
2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning