29 Jun Question E20.16. (amortization of Accumulated Oci (g/l),
Question
E20.16.
(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.
Incurred during the Year
(Gain) or Loss
2012
$300,000?
2013
?480,000?
2014
?(210,000)
2015
?(290,000)
Other information about the company’s pension obligation and plan assets is as follows.
As of January 1,
Projected Benefit Obligation
Plan Assets (market-related asset value)
2012
$4,000,000
$2,400,000
2013
?4,520,000
?2,200,000
2014
?5,000,000
?2,600,000
2015
?4,240,000
?3,040,000
Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2012. 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 2012, 2013, 2014, and 2015. Apply the “corridor” approach in determining the amount to be amortize
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