The following is partial information related to Stanley Ltd.’s non-pension, post-retirement benefit plan at December 31, 2011:
Accrued post-retirement benefit obligation, accounting basis .....$190,000
Accrued post-retirement benefit obligation, funding basis ........ 160,000
Plan assets (at fair value) ................... 130,000
Past service cost arising in current year .............. 12,000
Transitional liability arising in current year ............. 20,000
Amortization expenses of $1,000 and $3,000 were incurred in the year related to the past service costs and transitional liability, respectively.
Instructions
(a) Prepare a schedule reconciling the funded status with the asset/liability reported on the balance sheet at December 31, 2011, assuming that Stanley Ltd. applies the deferral and amortization approach.
(b) Prepare a schedule reconciling the funded status with the asset/liability reported on the balance sheet at December 31, 2011, assuming that Stanley Ltd. applies the immediate recognition approach.