. (Computation of Actual Return, Gains and Losses, Corridor Test, and Pension Expense) Linda Berstler Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan.

Instructions

(a) Compute the actual return on the plan assets in 2011.

(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2011. (Assume the January 1, 2011, balance was zero.)

(c) Compute the amount of net gain or loss amortization for 2011 (corridor approach).

(d) Compute pension expense for 2011.

Transcribed Image Text:

January 1, December 31, 2011 2011 Vested benefit obligation $1,500 $1,900 Accumulated benefit obligation 1,900 2,730 Projected benefit obligation 2,800 3,645 Plan assets (fair value) 1,700 2,620 Settlement rate and expected rate of return 10% Pension asset/liability 1,100 ? Service cost for the year 2011 400 Contributions (funding in 2011) 800 Benefits paid in 2011 200