Blossom Company sponsors a defined benefit pension plan for its 600 employees. The company’s actuary provided the following information about the plan. January 1, December 31, 2020 2020 2021 Projected benefit obligation $2,780,000 $3,632,200 $4,175,776 Accumulated benefit obligation 1,890,000 2,421,000 2,899,000 Plan assets (fair value and market-related asset value) 1,700,000 2,902,000 3,796,000 Accumulated net (gain) or loss (for purposes of the corridor calculation) 0 200,000 (24,000 ) Discount rate (current settlement rate) 9 % 8 % Actual and expected asset return rate 10 % 10 % Contributions 1,032,000 603,800 The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $402,000 in 2020 and $477,000 in 2021. The accumulated OCI (PSC) on January 1, 2020, was $1,438,500. No benefits have been paid. (a) Correct answer icon Your answer is correct. Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2020 and 2021. Amount of accumulated OCI (PSC) to be amortized for the year 2020 $ Amount of accumulated OCI (PSC) to be amortized for the year 2021 $ eTextbook and Media Attempts: 2 of 3 used (b) Partially correct answer icon Your answer is partially correct. Prepare a schedule which reflects the amount of accumulated OCI (G/L) to be amortized as a component of pension expense for 2020 and 2021. Year Projected Benefit Obligation Plan Assets 10% Corridor Accumulated OCI (G/L) Minimum Amortization of (Gain) Loss 2020 $ $ $ $ $ 2021
Blossom Company sponsors a defined benefit pension plan for its 600 employees. The company’s actuary provided the following information about the plan. January 1, December 31, 2020 2020 2021 Projected benefit obligation $2,780,000 $3,632,200 $4,175,776 Accumulated benefit obligation 1,890,000 2,421,000 2,899,000 Plan assets (fair value and market-related asset value) 1,700,000 2,902,000 3,796,000 Accumulated net (gain) or loss (for purposes of the corridor calculation) 0 200,000 (24,000 ) Discount rate (current settlement rate) 9 % 8 % Actual and expected asset return rate 10 % 10 % Contributions 1,032,000 603,800 The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $402,000 in 2020 and $477,000 in 2021. The accumulated OCI (PSC) on January 1, 2020, was $1,438,500. No benefits have been paid. (a) Correct answer icon Your answer is correct. Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2020 and 2021. Amount of accumulated OCI (PSC) to be amortized for the year 2020 $ Amount of accumulated OCI (PSC) to be amortized for the year 2021 $ eTextbook and Media Attempts: 2 of 3 used (b) Partially correct answer icon Your answer is partially correct. Prepare a schedule which reflects the amount of accumulated OCI (G/L) to be amortized as a component of pension expense for 2020 and 2021. Year Projected Benefit Obligation Plan Assets 10% Corridor Accumulated OCI (G/L) Minimum Amortization of (Gain) Loss 2020 $ $ $ $ $ 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Blossom Company sponsors a defined benefit pension plan for its 600 employees. The company’s actuary provided the following information about the plan.
The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $402,000 in 2020 and $477,000 in 2021. The accumulated OCI (PSC) on January 1, 2020, was $1,438,500. No benefits have been paid.
|
January 1,
|
December 31,
|
||||||
|
2020
|
2020
|
2021
|
|||||
| Projected benefit obligation | $2,780,000 | $3,632,200 | $4,175,776 | ||||
| Accumulated benefit obligation | 1,890,000 | 2,421,000 | 2,899,000 | ||||
| Plan assets (fair value and market-related asset value) | 1,700,000 | 2,902,000 | 3,796,000 | ||||
| Accumulated net (gain) or loss (for purposes of the corridor calculation) | 0 | 200,000 | (24,000 | ) | |||
| Discount rate (current settlement rate) | 9 | % | 8 | % | |||
| Actual and expected asset return rate | 10 | % | 10 | % | |||
| Contributions | 1,032,000 | 603,800 |
The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $402,000 in 2020 and $477,000 in 2021. The accumulated OCI (PSC) on January 1, 2020, was $1,438,500. No benefits have been paid.
(a)
Correct answer icon
Your answer is correct.
Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2020 and 2021.
| Amount of accumulated OCI (PSC) to be amortized for the year 2020 |
$
|
|
| Amount of accumulated OCI (PSC) to be amortized for the year 2021 |
$
|
eTextbook and Media
Attempts: 2 of 3 used
(b)
Partially correct answer icon
Your answer is partially correct.
Prepare a schedule which reflects the amount of accumulated OCI (G/L) to be amortized as a component of pension expense for 2020 and 2021.
|
Year
|
Projected Benefit
Obligation |
Plan
Assets |
10%
Corridor |
Accumulated
OCI (G/L) |
Minimum Amortization
of (Gain) Loss |
|||||
| 2020 |
$
|
$
|
$
|
$
|
$
|
|||||
| 2021 |
|
|
|
|
|
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