Gustafson Inc-Gustafson Inc. has a stable labor force of 400 employees who are expected to

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Description

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 amortized each year.

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