(Amortization of Accumulated OCI Balances) Keeton Company sponsors a defined benefit pen- sion plan for its 600 employees. The company’s actuary provided the following information about the plan.
January 1, December 31,
Projected benefit obligation
Accumulated benefit obligation
Plan assets (fair value and market-related
Accumulated net (gain) or loss (for purposes
of the corridor calculation)
Discount rate (current settlement rate)
Actual and expected asset return rate
The average r emaining service life per employee is 10.5 years. The service cost component of net periodic
pension expense for employee services r ende r ed amounted to $400,000 in 2014 and $475,000 in 2015. The
accumulated OCI (PSC) on January 1, 2014, was $1,260,000. No benefits have been paid.
(Round to the nea r est dolla r .)
(a) Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2014 and 2015.
(b) Prepare a schedule which reflects the amount of accumulated OCI (G/L) to be amortized as a com- ponent of pension expense for 2014 and 2015.
(c) Determin e th e tota l amoun t o f pensio n expens e t o b e r ecognize d b y Keeto n Compan y i n 201 4 an d 2015.