Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 17, Problem 17.7P
Determining the amortization of net gain
• LO17–6
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2018, the following pension-related data were available:
| ($ in thousands) | |
| Net gain—AOCI | $ 170 |
| Accumulated benefit obligation | 1,170 |
| Projected benefit obligation | 1,400 |
| Fair value of plan assets | 1,100 |
| Average remaining service period of active employees (expected to remain constant for the next several years) | 15 years |
The
Required:
1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2018.
2. Assume the net pension expense for 2018, not including the amortization of the net gain component, is $325,000. What is pension expense for the year?
3. Determine the net loss—AOCI or net gain—AOCI as of January 1, 2019.
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Current Attempt in Progress
The actuary for the pension plan of Bridgeport Inc. calculated the following net gains and losses.
Incurred during the Year
2020
2021
2022
2023
As of January 1,
Other information about the company's pension obligation and plan assets is as follows.
2020
2021
2022
2023
2020
2021
2022
2023
Projected Benefit
Obligation
Save for Later
(Gain) or Loss
$298,100
478,900
$
(210,400)
(288,600)
Year Minimum Amortization of (Gain) Loss
$
Bridgeport Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years
for all participating employees is 4,800. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2020. The market-
related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee
as the basis for amortization.
$
Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense…
Current Attempt in Progress
The following data are for the pension plan for the employees of Beaufort Company.
Accumulated benefit obligation
Projected benefit obligation
Market-related asset value
Plan assets (at fair value)
Unrecognized net loss
Settlement rate (for year)
Expected rate of return (for year)
1/1/17
O $135,300.
O $81,700.
O $51,800.
O $37,600.
$7,350,000
7,998,000
7,468,000
7,762,000
0
12/31/17 12/31/18
$7,644,000 $9,996,000
8,232,000 10,689.000
8.350,000 9,014,000
8.820,000
9,901,000
1,450,000
1,490,000
10%
995
9%
8%
Beaufort's contribution was $1,247,000 in 2018 and benefits paid were $1.102,000. Beaufort estimates that the average remaining
service life is 15 years. The actual return on plan assets in 2018 was $749,700. The unexpected gain on plan assets in 2018 was
Knowledge Check 01Calder Company has a defined benefit pension plan. Pension-related data for the current calendar year are shown below:
Average remaining service period of active employees
12
years
Net gain, January 1
$
214,600
PBO, January 1
1,630,000
Plan assets, January 1
1,930,000
What is the amount of the amortization of the net loss or gain that should be included as a component of pension expense for the current year?
Chapter 17 Solutions
Intermediate Accounting
Ch. 17 - Prob. 17.1QCh. 17 - Prob. 17.2QCh. 17 - Prob. 17.3QCh. 17 - What is the vested benefit obligation?Ch. 17 - Prob. 17.5QCh. 17 - Prob. 17.6QCh. 17 - Name three events that might change the balance of...Ch. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - Prob. 17.10Q
Ch. 17 - The return on plan assets is the increase in plan...Ch. 17 - Define prior service cost. How is it reported in...Ch. 17 - Prob. 17.13QCh. 17 - Is a companys PBO reported in the balance sheet?...Ch. 17 - What two components of pension expense may be...Ch. 17 - Prob. 17.16QCh. 17 - Evaluate this statement: The excess of the actual...Ch. 17 - Prob. 17.18QCh. 17 - TFC Inc. revises its estimate of future salary...Ch. 17 - Prob. 17.20QCh. 17 - Prob. 17.21QCh. 17 - Prob. 17.22QCh. 17 - The components of postretirement benefit expense...Ch. 17 - The EPBO for Branch Industries at the end of 2018...Ch. 17 - Prob. 17.25QCh. 17 - Prob. 17.26QCh. 17 - Prob. 17.1BECh. 17 - Prob. 17.2BECh. 17 - Prob. 17.3BECh. 17 - Prob. 17.4BECh. 17 - Prob. 17.5BECh. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Net gain LO176 The projected benefit obligation...Ch. 17 - Prob. 17.12BECh. 17 - Prob. 17.13BECh. 17 - Postretirement benefits; determine the APBO and...Ch. 17 - Prob. 17.15BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Prob. 17.5ECh. 17 - Prob. 17.6ECh. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Prob. 17.9ECh. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - PBO calculations; ABO calculations; present value...Ch. 17 - Prob. 17.13ECh. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Prob. 17.16ECh. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Prob. 17.21ECh. 17 - Prob. 17.22ECh. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.25ECh. 17 - Prob. 17.26ECh. 17 - Prob. 17.27ECh. 17 - Prob. 17.28ECh. 17 - Prob. 17.29ECh. 17 - Prob. 17.30ECh. 17 - Prob. 17.31ECh. 17 - Prob. 17.32ECh. 17 - Prob. 17.33ECh. 17 - Prob. 17.1PCh. 17 - PBO calculations; present value concepts LO173...Ch. 17 - Service cost, interest, and PBO calculations;...Ch. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.6PCh. 17 - Determining the amortization of net gain LO176...Ch. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Prob. 17.13PCh. 17 - Prob. 17.14PCh. 17 - Prob. 17.15PCh. 17 - Prob. 17.16PCh. 17 - Prob. 17.17PCh. 17 - Prob. 17.18PCh. 17 - Prob. 17.19PCh. 17 - Prob. 17.20PCh. 17 - Prob. 17.21PCh. 17 - Prob. 17.1BYPCh. 17 - Prob. 17.2BYPCh. 17 - Prob. 17.3BYPCh. 17 - Prob. 17.5BYPCh. 17 - Prob. 17.6BYPCh. 17 - Prob. 17.7BYPCh. 17 - Prob. 17.8BYPCh. 17 - Prob. 17.9BYPCh. 17 - Prob. 17.11BYPCh. 17 - Prob. 1CCTCCh. 17 - Prob. 1CCIFRS
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