Question 1 The actuary for the pension plan of Gustafson Inc calculated the following net gains and losses Incurred during the Year (Gain) or Loss 2014 $300,000 2015 480,000 2016 (210,000) 2017 (290,000) Other information about the company's pension obligation and plan assets is as follows As of January 1, Projected Benefit Obligation Plan Assets (market related asset value) 2014 $4,000,000 $2,400,000 2015 4,520,000 2,200,000 2016 5,000,000 2,600,000 2017 4,240,000 3,040,000 Gustafson Inc has a stable labor force of 400 employees who are expected to receive benefits under the plan The total service years for all participating employees is5,600 The beginning balance of accumulated OCI (G L) is zero on January 1, 2014 The market related value and the fair value of plan assets are the same for the 4 year period Use the average remaining service life per employee as the basis for amortization Compute the minimum amount of accumulated OCI (G L) amortized as a component of net periodic pension expense for each of the years 2014, 2015, 2016, and 2017 Apply the corridor approach in determining the amount to be amortized each year (Round answers to 0 decimal places, e g 2,500 ) Year Minimum Amortization of (Gain) Loss 2014 $ 2015 $ 2016 $ 2017 $ 2 Webb Corp sponsors a defined benefit pension plan for its employees On January 1, 2014, the following balances relate to this plan Plan assets $480,000 Projected benefit obligation 600,000 Pension asset liability 120,000 Accumulated OCI (PSC) 100,000 Dr As a result of the operation of the plan during 2014, the following additional data are provided by the actuary Service cost $90,000 Settlement rate, 9 Actual return on plan assets 55,000 Amortization of prior service cost 19,000 Expected return on plan assets 52,000 Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions 76,000 Contributions 99,000 Benefits paid retirees 85,000 Using the data above, compute pension expense for Webb Corp for the year 2014 by preparing a pension worksheet WEBB CORP Pension Worksheet General Journal Entries Memo Record Items Annual Pension Expense Cash OCIPrior Service Cost OCI Gain Loss Pension Asset Liability Projected Benefit Obligation Plan Assets Balance, Jan 1, 2014 $ Dr Cr $ Dr Cr $ Dr Cr $ Dr Cr $ Dr Cr $ Dr Cr $ Dr Cr Service cost Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Interest cost Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Actual return Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Unexpected gain Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Amortization of PSC Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Liability increase Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Contributions Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Benefits Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Journal entry for 2014 $ Dr Cr $ Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Accumulated OCI, Dec 31, 2013 Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Balance, December 31, 2014 $ Dr Cr $ Dr Cr $ Dr Cr $ Dr Cr $ Dr Cr

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 27, 2024

Question: 1. The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses. Incurred during the Year (Gain) or Loss

Question:

1. The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.

Incurred during the Year	(Gain) or Loss
2014	$300,000
2015	480,000
2016	(210,000)
2017	(290,000)

Other information about the company's pension obligation and plan assets is as follows.

As of January 1,	Projected Benefit Obligation	Plan Assets (market-related asset value)
2014	$4,000,000	$2,400,000
2015	4,520,000	2,200,000
2016	5,000,000	2,600,000
2017	4,240,000	3,040,000

Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2014. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2014, 2015, 2016, and 2017. Apply the "corridor" approach in determining the amount to be amortized each year.(Round answers to 0 decimal places, e.g. 2,500.)

Year	Minimum Amortization of (Gain) Loss
2014	$
2015	$
2016	$
2017	$

Webb Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2014, the following balances relate to this plan.

Plan assets	$480,000
Projected benefit obligation	600,000
Pension asset/liability	120,000
Accumulated OCI (PSC)	100,000	Dr.

As a result of the operation of the plan during 2014, the following additional data are provided by the actuary.

Service cost	$90,000
Settlement rate, 9%
Actual return on plan assets	55,000
Amortization of prior service cost	19,000
Expected return on plan assets	52,000
Unexpected loss from change in projected benefit obligation, due to change in actuarial predictions	76,000
Contributions	99,000
Benefits paid retirees	85,000