Question
(S.0.3) Larsen Company has a defined benefit pension plan which covers 220 employees. Based upon negotiations with the employees, Larsen Company amends its pension plan
(S.0.3) Larsen Company has a defined benefit pension plan which covers 220 employees. Based upon negotiations with the employees, Larsen Company amends its pension plan as of 1/1/17 and grants $111,600 of prior service cost to its employees. The following schedule reflects employee groups based on expected years of retirement. Group A B C D E Number of Employees 30 40 35 70 45 220 Expected Retirement on 12/31 2017 2018 2019 2020 2021 . Instructions: Compute the annual amortization of the prior service cost using the 1) years of service method, and 2)straightline amortization over the average remaining service life of employees.
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