(Amortization of Accumulated OCI Balances) Keeton Company sponsors a defined benefit pen- sion plan

(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,

2014

2014

2015

Projected benefit obligation

$2,800,000

$3,650,000

$4,195,000

Accumulated benefit obligation

1,900,000

2,430,000

2,900,000

Plan assets (fair value and market-related

asset value)

1,700,000

2,900,000

3,790,000

Accumulated net (gain) or loss (for purposes

of the corridor calculation)

–0–

198,000

(24,000)

Discount rate (current settlement rate)

9%

8%

Actual and expected asset return rate

10%

10%

Contributions

1,030,000

600,000

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.

Instructions

(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.

"We Offer Paper Writing Services on all Disciplines, Make an Order Now and we will be Glad to Help"