Vrable Corporation has a defined benefit pension plan. Two alternative possibilities

Vrable Corporation has a defined benefit pension plan. Two alternative possibilities for pension- related data for the current calendar year are shown below:

Case 1 Case 2

Net loss (gain), Jan. 1 $240,000 $(230,000)

Loss (gain) on plan assets (8,000) (6,000)

Loss (gain) on PBO (17,000) 12,000

ABO, Jan 1 (1,900,000) (1,500,000)

PBO, Jan 1 (2,500,000) (1,700,000)

Plan assets, Jan 1 2,100,000 2,000,000

Average remaining service period

of active employees (years) 10 12

 

REQUIRED:

For each independent case, calculate amortization of the net loss or gain that should be included as a component of pension expense for the current year.

Here’s the SOLUTION

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