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Amortization of prior service cost On January 1, 2013, Baznik Company adopted a defined benefit pension plan. At that time Baznik awarded retroactive benefits to

Amortization of prior service cost

On January 1, 2013, Baznik Company adopted a defined benefit pension plan. At that time Baznik awarded retroactive benefits to certain employees . These retroactive benefits resulted in a prior service cost of $1,320,000 on that date (whichit did not fund).

Baznikhas six participating employees who are expected to receive the retroactive benefits. Following a schedule that that identifies the particpating employees and their expected years of future service as of January 1, 2013.

Employee Expected years of Future Service

A 1

B 3

C 4

D 5

E 5

F 6

Baznik decided to amortize the prior service cost to pension expense using the years of future service method. The following are the amounts of the components of Baznik's pension expense, in addition to the amortization of the prior year service cost for 2013 and 2014..

2013 2014

Service cost $516,000 $558,000

Interest cost on projected benefit obligation 118,000 175,932

Expected on plan assets __ 93,580

Baznik contributed $935,800 and $914,000 to the pension fund at the end of 2013 and 2014, respectively

1. a prepare a set of schedules for the Baznik Company to determine tthe amortization fraction for each year. Enter tthe amortization fraction as a fraction . For example 3/10.

Baznik Company

Amortization Fractions

2103-2018

Expected years of future service Number of years rendered 2013 Number of years rendered 2014 Number of years rendered 2015 Number of years rendered 2016, Number of years rendered 2017, Number of years rendered 2018

Total

Amotization fraction

1 b. Prepare a set of schedules for Barnik Company to determine the amortization of the prior year service cost

Baznik Company

Prior year service cost

2013-2018

Total prior year service cost Amortization fraction Amortization to increase pension expense Remaining prior year service

2. Prepare all the journal entries related to Baznik's pension plan for 2013 and 2014. For a compoound transaction, if an amount box does not require entry,leave it blank.

Prior benefit

Accrued prepaid pension

Dec 31

Accrued/prepaid pension

Payment

cash

Accrued/prepaid pension

Amortize Accrued/prepaid pension

Accrued/prepaid pension

2014

Dex 31 Accrued/prepaid pension

Payment

Cash

Accrued/prepaid pension

Dec 31

Accrued/prepaid pension

Amortize

Accrued/prepaid pension

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