E19.8 (LO 4) (Application of the Corridor Approach) 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. Plan Assets Value Projected Benefit Obligation 2024 $2,000,000 2025 2,400,000 2026 2,950,000 2027 3,600,000 $1,900,000 2,500,000 2,600,000 3,000,000 The average remaining service life per employee in 2024 and 2025 is 10 years; in 2026 and 2027, it is 12 years. The net gain or loss that occurred during each year is as follows: 2024, $280,000 loss; 2025, $90,000 loss; 2026, $11,000 loss; and 2027, $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.
E19.8 (LO 4) (Application of the Corridor Approach) 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. Plan Assets Value Projected Benefit Obligation 2024 $2,000,000 2025 2,400,000 2026 2,950,000 2027 3,600,000 $1,900,000 2,500,000 2,600,000 3,000,000 The average remaining service life per employee in 2024 and 2025 is 10 years; in 2026 and 2027, it is 12 years. The net gain or loss that occurred during each year is as follows: 2024, $280,000 loss; 2025, $90,000 loss; 2026, $11,000 loss; and 2027, $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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:E19.8 (LO 4) (Application of the Corridor Approach) 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.
Plan Assets Value
Projected Benefit Obligation
2024
$2,000,000
2025
2,400,000
2026
2,950,000
2027
3,600,000
$1,900,000
2,500,000
2,600,000
3,000,000
The average remaining service life per employee in 2024 and 2025 is 10 years; in 2026 and 2027, it is 12 years.
The net gain or loss that occurred during each year is as follows: 2024, $280,000 loss; 2025, $90,000 loss; 2026,
$11,000 loss; and 2027, $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.
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