Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Analyzing Pension Gain/Loss
Spears Company presents the following information related to its pension plan for the year, before recording pension expense.
Projected Benefit Obligation, Jan. 1: $300,000 Cr
Projected Benefit Obligation, Dec. 31: 325,000 Cr
Accumulated OCI-Pension Gain/Loss, Jan. 1: 12,000 Cr
Plan Assets, Jan. 1: 280,000 Dr
Plan Assets, Dec.31: 295,000 Dr
Actuarial loss on PBO, determined at Dec. 31: $4,200
Contributions to pension fund: 10,000
Benefits paid: 15,000
Average remaining service period of employees, current and next year: 20 years
Expected
Required:
a, Determine the amortization of Accumulated OCI-Pension Gain/Loss for the current year, usign (1) corridor (minimum amortization) and (2) straight-line amortization based on average remaining service period.
Note: Do not use negative signs with your answers.
1. Amortization under the corridor approach.
2. Amortization under the straight-line method.
b. Determine the Accumulated OCI-Pension Gain/Loss balance at January 1 of next year assuming straight line amortization.
Note: Use a negative sign to indicate a credit balance in the account.
Accumulated OCI-Pension Gain/Loss, Jan. 1.
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