Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below: ($ in thousands) Case 1Case 2Case 3Net loss (gain)—AOCI, Jan. 1$335 $(397)$305 2021 loss (gain) on plan assets (26) (23) 5 2021 loss (gain) on PBO (38) 31 (310)Accumulated benefit obligation, Jan. 1 (3,100) (2,700) (1,600)Projected benefit obligation, Jan. 1 (3,460) (2,820) (1,850)Fair value of plan assets, Jan. 1 2,950 2,850 1,700 Average remaining service periodof active employees (years) 12 14 10 Required:1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021.2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.

Case POB (A) Plan Asset(B) Greater of (A) and (B) 10% of greater Case 1 3,460 2,950 3,460 346…

Answered: For each independent case, calculate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2021, are shown below:

	($ in thousands)
	Case 1	Case 2	Case 3
Net loss (gain)—AOCI, Jan. 1	$	335		$	(397	)	$	305
2021 loss (gain) on plan assets		(26	)		(23	)		5
2021 loss (gain) on PBO		(38	)		31			(310	)
Accumulated benefit obligation, Jan. 1		(3,100	)		(2,700	)		(1,600	)
Projected benefit obligation, Jan. 1		(3,460	)		(2,820	)		(1,850	)
Fair value of plan assets, Jan. 1		2,950			2,850			1,700
Average remaining service period of active employees (years)		12			14			10

Required:
1. For each independent case, calculate any amortization of the net loss or gain that should be included as a component of pension expense for 2021.
2. For each independent case, determine the net loss—AOCI or net gain—AOCI as of January 1, 2022.

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