II. Corridor approach (amortization of net gains and losses.) Gibbs Company has 200 employees who are expected to receive benefits under the company's defined-benefit pension plan. The total number of service-years of these employees is 2,000. The actuary for the company's pension plan calculated the following net gains and losses:

For the Year Ended

December 31 Gain Or Loss

2014 $ 640,000 Gain

2015 554,000 Loss

2016 990,000 Loss

Prior to 2014, there was no unrecognized net gain or loss. Information about the company's projected benefit obligation and fair value of plan assets follows:

As of January 1

2014 2015 2016

Projected benefit obligation $2,100,000 $2,340,000 $2,940,000

Fair value of plan assets 1,680,000 2,460,000 2,550,000

Instructions

Based on the above information about Gibbs Company, prepare a schedule which reflects the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2014, 2015, and 2016. The company amortizes net gains or losses using the straight-line method over the average service life of participating employees, which is 10 years for 2014, 2015, and 2016.

II. Corridor Approach. Show your calculations below, in good form, including your calculation of the amortized amount each year and the calculation of the balance in net gain or loss at the end of each year. Be sure to indicate gain or loss where appropriate.

2014 Beginning ______________________________

Amortization ______________________________

New G/L ______________________________

2015 Beginning ______________________________

Amortization ______________________________

New G/L ______________________________

2016 Beginning ______________________________

Amortization ______________________________

New G/L ______________________________

2017 Beginning ______________________________