(Amortizatio n o f Accumulate d OC I (G/L) , Corrido r Approach , Pensio n Expens e Computation )

(Amortizatio n o f Accumulate d OC I (G/L) , Corrido r Approach , Pensio n Expens e Computation ) The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.

Incur r ed

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 is 5,600. 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.

Instructions

(Round to the nea r est dolla r .)

Prepare a schedule which reflects the minimum amount of accumulated OCI (G/L) amortized as a compo- nent 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.

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