22. (4 points) M Service Co. reported the following for its defined benefit pension plan for 2016: Service cost $560,000 Actual return on plan assets 157,000 Benefits paid to retirees 198,000 Cash contributions made by M to the pension plan 250,000 Settlement rate 3.50% Expected rate of return on plan assets 5.20% Average remaining service life of existing employees 15 years Projected benefit obligation as of 12-31-15 3,190,000 Fair value of plan assets as of 12-31-15 3,265,000 Other comprehensive income - Gains/Loss as of 12-31-15 340,000 cr a. b. c. Using the above information for M, prepare a pension work sheet for 2016. Using the work sheet, prepare the entry to reflect the accounting for the company's pension plan for the year ending 12-31-16. Will M need to record corridor amortization for 2017, yes or no? Support your answer mathematically Yes, because OCI is greater than 10% of PBO and Plan asset Cash and/or CS & APIC Expense OCI -PSC Item 01-01-19 balance Service cost Interest cost OCIG/L $340,000 cr Asset/ Liability $dr PBO $3,190,000 cr $ 560,000 cr $ cr Plan Assets $3,265,000 dr $560,000dr S dr $ dr $dr Scr Sdr Sdr S dr $ cr Return Unexpected G/L Amortize PSC Amortize OCI-G/ Liability (Inc/dec) Contributions Benefits Adjustments JE $ dr $ $ $ $ $ $ $ 22. (4 points) M Service Co. reported the following for its defined benefit pension plan for 2016: Service cost $560,000 Actual return on plan assets 157,000 Benefits paid to retirees 198,000 Cash contributions made by M to the pension plan 250,000 Settlement rate 3.50% Expected rate of return on plan assets 5.20% Average remaining service life of existing employees 15 years Projected benefit obligation as of 12-31-15 3,190,000 Fair value of plan assets as of 12-31-15 3,265,000 Other comprehensive income - Gains/Loss as of 12-31-15 340,000 cr a. b. c. Using the above information for M, prepare a pension work sheet for 2016. Using the work sheet, prepare the entry to reflect the accounting for the company's pension plan for the year ending 12-31-16. Will M need to record corridor amortization for 2017, yes or no? Support your answer mathematically Yes, because OCI is greater than 10% of PBO and Plan asset Cash and/or CS & APIC Expense OCI -PSC Item 01-01-19 balance Service cost Interest cost OCIG/L $340,000 cr Asset/ Liability $dr PBO $3,190,000 cr $ 560,000 cr $ cr Plan Assets $3,265,000 dr $560,000dr S dr $ dr $dr Scr Sdr Sdr S dr $ cr Return Unexpected G/L Amortize PSC Amortize OCI-G/ Liability (Inc/dec) Contributions Benefits Adjustments JE $ dr $ $ $ $ $ $ $
