Pharoah Inc. has a defined-benefit pension plan covering its 248 employees. Pharoah agrees to amend its pension benefits. The prior service cost associated with the amendment is $180230. The employees are grouped according to expected years of retirement, as follows: Group A B C D Number of Employees 32 62 $66712 $41426 O $45058 $5632 102 52 Expected Retirement on December 31 2025 2026 2027 2028 Using the straight-line amortization over average remaining service life approach, what is the annual amount of Prior Service Cost amortization recognized in 2027?

Pharoah Inc. has a defined-benefit pension plan covering its 248 employees. Pharoah agrees to amend its pension benefits. The prior service cost associated with the amendment is $180230. The employees are grouped according to expected years of retirement, as follows: Group A B C D Number of Employees 32 62 $66712 $41426 O $45058 $5632 102 52 Expected Retirement on December 31 2025 2026 2027 2028 Using the straight-line amortization over average remaining service life approach, what is the annual amount of Prior Service Cost amortization recognized in 2027?

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 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.
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 $ 337 $ (407 ) $ 297 2021 loss (gain) on plan assets (28 ) (25 ) 5 2021 loss (gain) on PBO (40 ) 33 (301 ) Accumulated benefit obligation, Jan. 1 (3,120 ) (2,720 ) (1,620 ) Projected benefit obligation, Jan. 1 (3,480 ) (2,840 ) (1,870 ) Fair value of plan assets, Jan. 1 2,970 2,870 1,720 Average remaining service periodof active employees (years) 12 15 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.
Klondike Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2019 and 2020. 2019 2020 Projected benefit obligation, January 1 Plan assets (fair value and market-related value), January 1 Pension asset/liability, January 1 Prior service cost, January 1 Service cost S600,000 410,000 190,000 Cr. 160,000 40,000 $ 59,000 Settlement rate 10% 10% Expected rate of return Actual return on plan assets 10% 10% 36,000 61,000 Amortization of prior service cost 70,000 50,000 Annual contributions 97,000 81,000 Benefits paid retirees 31,500 54,000 87,000 721,800 Increase in projected benefit obligation due to changes in actuarial assumptions Accumulated benefit obligation at December 31 Average service life of all employees Vested benefit obligation at December 31 -0- 789,000 20 years 464,000 Instructions (a) For both years 2019 and 2020, compute the annual pension expense.
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Cullumber Company has 120 employees who are expected to receive benefits under the company's defined-benefit pension plan. The total number of service-years of these employees is 1,200. The actuary for the company's pension plan calculated the following net gains and losses: For the Year EndedDecember 31 (Gain) Or Loss 2020 $560,000 2021 (474,000) 2022 910,000 Prior to 2020, there was no unrecognized net gain or loss.Information about the company's projected benefit obligation and market-related (and fair) value of plan assets follows: As of January 1 2020 2021 2022 Projected benefit obligation $2,020,000 $2,260,000 $2,860,000 Fair value of plan assets 1,600,000 2,380,000 2,470,000 Based on the above information about Cullumber Company, prepare a schedule which reflects the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2020, 2021, and 2022. The company amortizes…
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Sheridan Company has 160 employees who are expected to receive benefits under the company's defined-benefit pension plan. The total number of service-years of these employees is 1,600. The actuary for the company's pension plan calculated the following net gains and losses: For the Year EndedDecember 31 (Gain) Or Loss 2020 $600,000 2021 (514,000) 2022 950,000 Prior to 2020, there was no unrecognized net gain or loss.Information about the company's projected benefit obligation and market-related (and fair) value of plan assets follows: As of January 1 2020 2021 2022 Projected benefit obligation $2,060,000 $2,300,000 $2,900,000 Fair value of plan assets 1,640,000 2,420,000 2,510,000 Based on the above information about Sheridan Company, prepare a schedule which reflects the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2020, 2021, and 2022. The company amortizes…