Shamrock Company has five employees participating in its defined benefit pension

Question

Shamrock Company has five employees participating in its defined benefit pension plan. Expected years of future service for these employees at the beginning of 2017 are as follows. Employee Jim Paul Nancy Dave Kathy Future Years of Service 6 0s On January 1, 2017, the company amended its pension plan, increasing its projected benefit obligation by $82,080 Compute the amount of prior service cost amortization for the years 2017 through 2022 using the years-of-service method, setting up appropriate schedules Year Annual Amortization 2017 2018 2019 2020 2021 2022

Explanation / Answer

Total Years of service :-

Cost Per Service Year :-

= Cost / Total Year of Service

= $82080 / 24

= $3420

Schedule of Prior Service Cost Amortization:-

Employees Years Jim 3 Paul 4 Nancy 5 Dave 6 Kathy 6 Total Year of Service 24

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