Question
a)Trina Elliott Inc. has the following balances at 1/1/20 that relate to its defined-benefit pension plan: Plan Assets $800,000 Net Pension Liability 100,000 Accumulated OCI
a)Trina Elliott Inc. has the following balances at 1/1/20 that relate to its defined-benefit pension plan:
Plan Assets
$800,000
Net Pension Liability
100,000
Accumulated OCI (PSC)
200,000
During 2020, the following additional data is available:
Service Cost for 2020
$75,000
Interest rate
15%
Actual return on plan assets in 2020
70,000
Amortization of prior service cost
8,000
Expected return on plan assets
80,000
Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions
60,000
Contributions in 2020
85,000
Benefits paid to retirees in 2020
55,000
Required:
a) Compute Pension Expense (Net Periodic Pension Cost) for the year 2020.
b)George Incorporated has the following balances as of the beginning of each year:
YearPlan AssetsPension Asset (Liability)
2020$1,700,000$(200,000)
20212,300,000100,000
In 2020 there is also a $250,000 opening balance in Accumulated OCI for unrecognized gains. The average remaining service life per employee in 2020 is 12 years, and in 2021 it is 10 years. The net gain or loss that occurred during each year is as follows:
YearGain (Loss)
2020$350,000
2021(400,000)
Required:
Compute the net gain/loss that is amortized in each of the 2 years above.
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
7th Canadian edition
1119368456, 978-1119211587, 1119211581, 978-1119320623, 978-1119368458
