Prior service cost is being amortized over a remaining service life of 8 years. The average service lives for current employees is 10 years. The minimum amount of gain/loss required under current GAAP is amortized each year. Assume the company funds 90% of pension expense. Make the journal entry to record pension expense for the year.
Prior service cost is being amortized over a remaining service life of 8 years. The average service lives for current employees is 10 years. The minimum amount of gain/loss required under current GAAP is amortized each year. Assume the company funds 90% of pension expense. Make the journal entry to record pension expense for the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ABC has the following information related to its defined benefit pension plan:
Projected benefit obligation at 12/31/x1
170,000
Settlement rate
9%
Projected benefit obligation at 12/31/x2
195,000
9,700
32,000
9,000 net gains
Service cost
Unamortized prior service cost at 12/31/x1
Unamortized actuarial gains/losses at 12/31/x1
Unamortized experience gains/losses at 12/31/x1
Fair value of plan assets at 12/31/x1
Actual return on plan assets during year x2
Expected rate of return on plan assets
12,000 net gains
187,000
15,000
8%
Prior service cost is being amortized over a remaining service life of 8 years. The average service
lives for current employees is 10 years.
The minimum amount of gain/loss required under current GAAP is amortized each year.
Assume the company funds 90% of pension expense. Make the journal entry to record pension
year.
expense for the
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