Sheridan Company has 160 employees who are expected to receive benefits under the company's defined-benefit pension plan. The total number of service-years of these employees is 1,600. The actuary for the company's pension plan calculated the following net gains and losses: For the Year Ended December 31 (Gain) Or Loss 2020 $600,000 2021 (514,000) 2022 950,000 Prior to 2020, there was no unrecognized net gain or loss. Information about the company's projected benefit obligation and market-related (and fair) value of plan assets follows: As of January 1 2020 2021 2022 Projected benefit obligation $2,060,000 $2,300,000 $2,900,000 Fair value of plan assets 1,640,000 2,420,000 2,510,000 Based on the above information about Sheridan Company, prepare a schedule which reflects the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2020, 2021, and 2022. The company amortizes net gains or losses using the straight-line method over the average service life of participating employees. Beginning of Year Projected Benefit Obligation Plan Assets Corridor Accumulated OCI (Gain/Loss) Amortization 2020 $ $ $ $ $ 2021 2022

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

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Sheridan Company has 160 employees who are expected to receive benefits under the company's defined-benefit pension plan. The total number of service-years of these employees is 1,600. The actuary for the company's pension plan calculated the following net gains and losses:

For the Year Ended December 31		(Gain) Or Loss
2020		$600,000
2021		(514,000)
2022		950,000

Prior to 2020, there was no unrecognized net gain or loss.

Information about the company's projected benefit obligation and market-related (and fair) value of plan assets follows:

	As of January 1
	2020	2021	2022
Projected benefit obligation	$2,060,000	$2,300,000	$2,900,000
Fair value of plan assets	1,640,000	2,420,000	2,510,000

Based on the above information about Sheridan Company, prepare a schedule which reflects the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2020, 2021, and 2022. The company amortizes net gains or losses using the straight-line method over the average service life of participating employees.

	Beginning of Year
	Projected Benefit Obligation	Plan Assets	Corridor	Accumulated OCI (Gain/Loss)	Amortization
2020	$	$	$	$	$
2021
2022

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