11 May Due In 2 Hours——-1 Page Only
I need 1 paragraph answer for each
WEEK 3: ACCOUNTING FOR POST-RETIREMENT BENEFITS
The two main types of pension plans are defined benefit plans and defined contribution plans. Explain the difference between the two. How does the accounting for each differ? With defined benefit plans, there are several levels of benefit obligations for the company. List these and describe what each represents. Which does GAAP require with recognition and why?
WEEK 3: WORKOUT ROOM APPLICATION
This week, we will cover accounting for pension plans and other post-retirement benefits (such as life insurance for retirees.) See the Assignments area to get a jump on some of the problems we’ll be concentrating on in this thread. Before starting to do problems together, what are the standard components in determining pension expenses on the financial statements? Let’s start with BE 20-3 and BE 20-6.
Kenseth Corp. has the following beginning-of-the-year present values for its projected benefit obligation and market-related values for its
pension plan assets.
Year
Projected Benefit Obligation
Plan Assets Value
2011
2012
2013
2014
$2,000,000
2,400,000
2,950,000
3,600,000
1,900,000.
2,500,000.
2,600,000
3,000,000
The average remaining service life per employee in 2011 and 2012 is 10 years and in 2013 and 2014 is 12 years. The net gain or loss that occurred during each year is as follows: 2011, $280,000 loss; 2012, $90,000 loss; 2013, $11,000 loss; and 2014, $25,000 gain. (In working the solution, the gains and losses must be aggregated to arrive at year-end balances.)
Instructions
Using the corridor approach, compute the amount of net gain or loss amortized and charged to pension expense in each of the four years, setting up an appropriate schedule.
Answer
Use the table below to answer the question.
Corridor and Minimum Loss Amortization
Years
Projected Benefit Obligation (a)
Plan Assets
10%
Corridor
Accumulated OCI
Minimum Amortization of Loss
2011
2012
2013
2014
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