please provide all steps! thanks Exercise 20-17 Ivanhoe Company sponsors a defin

ID: 2333276 • Letter: P

Question

please provide all steps! thanks

Exercise 20-17 Ivanhoe Company sponsors a defined benefit pension plan for its 600 employees. The company's actuary provided the following information about the plan. January 1, December 31, 2017 2017 2018 Projected benefit obligation Accumulated benetit obligation Plan assets (tair value and market-related asset value) Accumulated net (gain) or loss (for purposes of the corridor calculation) Discount rate (current scttlement rate) Actual and expected asset return rate Contributions $2,830,000 S3,678,700 ,225,996 1,910,000 2,435,000 2,920,000 1,690,000 2,895,000 3,784,000 196,000 (24,000) 9% 8% 10% 10% 1,036,000 599,500 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 $398,000 in 2017 and $473,000 in 2018. The accumulated OCI (PSC on lanuary 1, 2017, was $1,470,000. No benefits have been paid. Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2017 and 2018. Amount of accumulated OCI (PSC) to be amortized for the year 2017 Amount of accumulated OCI (PSC) to be amortized for the year 2018 Prepare a schedule which retlects the amount of accumulated OCI (G/L) to be amortized as a component of pension expense for 2017 and 2018 Projected Benefit Plan 10% Accumulated Minimum Amortization

Explanation / Answer

Amount of accumulated OCI (PSC) to be amortized for the year 2017:

$1,470,000 ÷ 10.5 years = $140,000

Amount of accumulated OCI (PSC) to be amortized for the year 2018:

$1,470,000 ÷ 10.5 years = $140,000

Year

Projected Benefit Obligation (a)

Plan Assets

10% Corridor

Accumulated OCI (G/L)(a)

Minimum Amortization of (Gain) Loss

2017

$2,830,000

$1,690,000

$283,000

2018

$3,678,700

$2,895,000

$367,870

$196,000

Note: $367,870 is greater than $196,000; therefore, no amortization.

Pension expense for 2017:

Particulars

Amount $

Calculation

Service cost

$398,000

Interest on projected benefit obligation

$254,700

($2,830,000*9%)

Less: Expected return on plan asset

-$169,000

($1,690,000*10%)

Amortization of prior service cost

$140,000

Pension expense

$623,700

Pension expense for 2018: