Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, Crew Inc. reported a $6,000 credit balance in its Accumulated OCI-Pension Gain/Loss account related to its pension plan. During the year, the following events occurred. • Actual return on plan assets was $8,000, and expected return was $10,000. • A gain on the PBO of $4,000 was determined by the actuary at December 31, based on changes in actuarial assumptions. Crew amortizes unrecognized gains and losses using the corridor approach over the average remaining service life of active employees (20 years for this year and next year). Further information on this plan follows for the current year. Dec. 31 PBO Fair value of plan assets Required Jan. 1 $50,000 $56,000 30,000 34,000 a. Compute amortization of Accumulated OCI-Pension Gain/Loss for the current year using the corridor approach. $ 50 b. Compute the balance in Accumulated OCI-Pension Gain/Loss on December 31 of the current year. • Note: Use a negative sign to indicate an accumulated loss. $ 7,950 c. Compute amortization of Accumulated OCI-Pension Gain/Loss for the next year using the corridor approach. • Note: Round your answer to the nearest whole dollar. $ 118 d. Instead, now assume that the company elects to amortize Accumulated OCI-Pension Gain/Loss using the straight- line method. Compute amortization of Accumulated OCI-Pension Gain/Loss for (1) this year and (2) next year. Amortization under the straight-line method, this year $ 300 Amortization under the straight-line method, next year $ 0 ✓

On January 1, Crew Inc. reported a $6,000 credit balance in its Accumulated OCI-Pension Gain/Loss account related to its pension plan. During the year, the following events occurred. • Actual return on plan assets was $8,000, and expected return was $10,000. • A gain on the PBO of $4,000 was determined by the actuary at December 31, based on changes in actuarial assumptions. Crew amortizes unrecognized gains and losses using the corridor approach over the average remaining service life of active employees (20 years for this year and next year). Further information on this plan follows for the current year. Dec. 31 PBO Fair value of plan assets Required Jan. 1 $50,000 $56,000 30,000 34,000 a. Compute amortization of Accumulated OCI-Pension Gain/Loss for the current year using the corridor approach. $ 50 b. Compute the balance in Accumulated OCI-Pension Gain/Loss on December 31 of the current year. • Note: Use a negative sign to indicate an accumulated loss. $ 7,950 c. Compute amortization of Accumulated OCI-Pension Gain/Loss for the next year using the corridor approach. • Note: Round your answer to the nearest whole dollar. $ 118 d. Instead, now assume that the company elects to amortize Accumulated OCI-Pension Gain/Loss using the straight- line method. Compute amortization of Accumulated OCI-Pension Gain/Loss for (1) this year and (2) next year. Amortization under the straight-line method, this year $ 300 Amortization under the straight-line method, next year $ 0 ✓

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 7RE
See similar textbooks
icon
Related questions
Question

hh

On January 1, Crew Inc. reported a $6,000 credit balance in its Accumulated OCI-Pension Gain/Loss account related to its pension plan. During the year, the following events occurred. • Actual return on plan assets was $8,000, and expected return was $10,000. • A gain on the PBO of $4,000 was determined by the actuary at December 31, based on changes in actuarial assumptions. Crew amortizes unrecognized gains and losses using the corridor approach over the average remaining service life of active employees (20 years for this year and next year). Further information on this plan follows for the current year. Dec. 31 PBO Fair value of plan assets Required Jan. 1 $50,000 $56,000 30,000 34,000 a. Compute amortization of Accumulated OCI-Pension Gain/Loss for the current year using the corridor approach. $ 50 b. Compute the balance in Accumulated OCI-Pension Gain/Loss on December 31 of the current year. • Note: Use a negative sign to indicate an accumulated loss. $ 7,950 c. Compute amortization of Accumulated OCI-Pension Gain/Loss for the next year using the corridor approach. • Note: Round your answer to the nearest whole dollar. $ 118 d. Instead, now assume that the company elects to amortize Accumulated OCI-Pension Gain/Loss using the straight- line method. Compute amortization of Accumulated OCI-Pension Gain/Loss for (1) this year and (2) next year. Amortization under the straight-line method, this year $ 300 Amortization under the straight-line method, next year $ 0 ✓
Transcribed Image Text:On January 1, Crew Inc. reported a $6,000 credit balance in its Accumulated OCI-Pension Gain/Loss account related to its pension plan. During the year, the following events occurred. • Actual return on plan assets was $8,000, and expected return was $10,000. • A gain on the PBO of $4,000 was determined by the actuary at December 31, based on changes in actuarial assumptions. Crew amortizes unrecognized gains and losses using the corridor approach over the average remaining service life of active employees (20 years for this year and next year). Further information on this plan follows for the current year. Dec. 31 PBO Fair value of plan assets Required Jan. 1 $50,000 $56,000 30,000 34,000 a. Compute amortization of Accumulated OCI-Pension Gain/Loss for the current year using the corridor approach. $ 50 b. Compute the balance in Accumulated OCI-Pension Gain/Loss on December 31 of the current year. • Note: Use a negative sign to indicate an accumulated loss. $ 7,950 c. Compute amortization of Accumulated OCI-Pension Gain/Loss for the next year using the corridor approach. • Note: Round your answer to the nearest whole dollar. $ 118 d. Instead, now assume that the company elects to amortize Accumulated OCI-Pension Gain/Loss using the straight- line method. Compute amortization of Accumulated OCI-Pension Gain/Loss for (1) this year and (2) next year. Amortization under the straight-line method, this year $ 300 Amortization under the straight-line method, next year $ 0 ✓
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS