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Pharoah Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 2012. Prior to 2025. cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2025, is as follows. 1. The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years. 2. The projected benefit obligation amounted to $4,906,600 and the fair value of pension plan assets was $2,941,000. The market-related asset value was also $2,941,000. Unrecognized prior service cost was $1,965,600.

Pharoah Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 2012. Prior to 2025. cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2025, is as follows. 1. The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years. 2. The projected benefit obligation amounted to $4,906,600 and the fair value of pension plan assets was $2,941,000. The market-related asset value was also $2,941,000. Unrecognized prior service cost was $1,965,600.

Intermediate Accounting: Reporting And Analysis
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 6E
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Pharoah Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 2012. Prior to 2025, cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2025, is as follows. 1. 2. The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years. (a) The projected benefit obligation amounted to $4,906,600 and the fair value of pension plan assets was $2,941,000. The market-related asset value was also $2,941,000. Unrecognized prior service cost was $1,965,600. On December 31, 2025, the projected benefit obligation and the accumulated benefit obligation were $4,792,000 and $3,961,000, respectively. The fair value of the pension plan assets amounted to $4,126,040 at the end of the year. A 10% settlement rate and a 10% expected asset return rate were used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2025 amounted to $203,000. The employer's contribution to the plan assets amounted to $764,000 in 2025. This problem assumes no payment of pension benefits. Prepare a schedule, based on the average remaining life per employee, showing the prior service cost that would be amortized as a component of pension expense for 2025, 2026, and 2027. (Round answers to O decimal places, e.g. 2,525.) Prior Service Cost Amortization 2025 2026 2027
Transcribed Image Text:Pharoah Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 2012. Prior to 2025, cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2025, is as follows. 1. 2. The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years. (a) The projected benefit obligation amounted to $4,906,600 and the fair value of pension plan assets was $2,941,000. The market-related asset value was also $2,941,000. Unrecognized prior service cost was $1,965,600. On December 31, 2025, the projected benefit obligation and the accumulated benefit obligation were $4,792,000 and $3,961,000, respectively. The fair value of the pension plan assets amounted to $4,126,040 at the end of the year. A 10% settlement rate and a 10% expected asset return rate were used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2025 amounted to $203,000. The employer's contribution to the plan assets amounted to $764,000 in 2025. This problem assumes no payment of pension benefits. Prepare a schedule, based on the average remaining life per employee, showing the prior service cost that would be amortized as a component of pension expense for 2025, 2026, and 2027. (Round answers to O decimal places, e.g. 2,525.) Prior Service Cost Amortization 2025 2026 2027
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