FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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(Amortization of Accumulated OCI (G/L), Corridor Approach, Pension Expense Computation) The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.
Check the below image for net gains and losses , pension obligation and plan assets .
Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total serviceyears for all participating employees is 5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2017. 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.
Instructions
(Round to the nearest dollar.)
Prepare a schedule which reflects the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2017, 2018, 2019, and 2020. Apply the “corridor” approach in determining the amount to be amortized each year.
Transcribed Image Text:Incurred
during the Year
(Gain) or Loss
$300,000
480,000
(210,000)
(290,000)
2017
2018
2019
2020
Other information about the company's pension obligation and plan assets is as follows.
Projected Benefit
Obligation
Plan Assets
As of January 1,
(market-related asset value)
$4,000,000
4,520,000
5,000,000
4,240,000
2017
$2,400,000
2018
2,200,000
2,600,000
3,040,000
2019
2020
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