January 1, December 31, 2020 2020 2021 Projected benefit obligation $2,780,000 $3,632,200 $4,175,776 Accumulated benefit obligation 1,890,000 2,421,000 2,899,000 Plan assets (fair value and market-related asset value) 1,700,000 2,902,000 3,796,000 Accumulated net (gain) or loss (for purposes of the corridor calculation) 0 200,000 (24,000 ) Discount rate (current settlement rate)
January 1, December 31, 2020 2020 2021 Projected benefit obligation $2,780,000 $3,632,200 $4,175,776 Accumulated benefit obligation 1,890,000 2,421,000 2,899,000 Plan assets (fair value and market-related asset value) 1,700,000 2,902,000 3,796,000 Accumulated net (gain) or loss (for purposes of the corridor calculation) 0 200,000 (24,000 ) Discount rate (current settlement rate)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 4E
Related questions
Question
Blossom Company sponsors a defined benefit pension plan for its 600 employees. The company’s actuary provided the following information about the plan.
The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $402,000 in 2020 and $477,000 in 2021. The accumulated OCI (PSC) on January 1, 2020, was $1,438,500. No benefits have been paid.
January 1,
|
December 31,
|
||||||
2020
|
2020
|
2021
|
|||||
Projected benefit obligation | $2,780,000 | $3,632,200 | $4,175,776 | ||||
Accumulated benefit obligation | 1,890,000 | 2,421,000 | 2,899,000 | ||||
Plan assets (fair value and market-related asset value) | 1,700,000 | 2,902,000 | 3,796,000 | ||||
Accumulated net (gain) or loss (for purposes of the corridor calculation) | 0 | 200,000 | (24,000 | ) | |||
Discount rate (current settlement rate) | 9 | % | 8 | % | |||
Actual and expected asset return rate | 10 | % | 10 | % | |||
Contributions | 1,032,000 | 603,800 |
The average remaining service life per employee is 10.5 years. The service cost component of net periodic pension expense for employee services rendered amounted to $402,000 in 2020 and $477,000 in 2021. The accumulated OCI (PSC) on January 1, 2020, was $1,438,500. No benefits have been paid.
(c)
Determine the total amount of pension expense to be recognized by Blossom Company in 2020 and 2021.
Pension expense for 2020 |
$
|
|
Pension expense for 2021 |
$
|
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