E20-8 - zero, please enter 0, do not leave any fields...

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E20-8 Your answer is correct. (Application of the Corridor Approach) Kenseth Corp. has beginning-of-the-year present values for its projected benefit obligation and market-related values for its pension plan assets. Project ed Plan Benefit Assets Obligat ion Value 2011 $2,000,000 $1,900,000 2012 2,400,000 2,500,000 2013 2,950,000 2,600,000 2014 3,600,000 3,000,000 The average remaining service life per employee in 2011 and 2012 is 10 years and in 2013 and 2014 is 12 years. The net gain or loss that occurred during each year is as follows: 2011, $280,000 loss; 2012, $90,000 loss; 2013, $11,000 loss; and 2014, $25,000 gain. (In working the solution the gains and losses must be aggregated to arrive at year-end balances.) Using the corridor approach, compute the amount of net gain or loss amortized and charged to pension expense in each of the four years, setting up an appropriate schedule. (Round answers to 0 decimal places, e.g. 12,510 and use rounded amount for future calculations. If answer is
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Unformatted text preview: zero, please enter 0, do not leave any fields blank.) Year Minimum Amortization of Loss 2011 $ 0 2012 $ 3,000 2013 $ 6,000 2014 $ 1,000 Solution E20-8 Corridor and Minimum Loss Amortization Year Projecte d Plan Assets 10% Corrido Accum ulated Minimum Amortization of Loss Benefit Obligati on (a) r OCI (G/L) (a) 2011 $2,000,000 $1,900,000 $200,000 $ 0 $ 0 2012 2,400,000 2,500,000 250,000 280,000 3,000 (b) 2013 2,950,000 2,600,000 295,000 367,000 (c) 6,000 (d) 2014 3,600,000 3,000,000 360,000 372,000 (e) 1,000 (f) (a) As of the beginning of the year. (b) ($280,000 $250,000) 10 years = $3,000 (c) $280,000 $3,000 + $90,000 = $367,000 (d) ($367,000 $295,000) 12 years = $6,000 (e) $367,000 $6,000 + $11,000 = $372,000 (f) $372,000 $360,000) 12 years = $1,000...
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