On 1/1/14 the average number of years until retirement for Delco Co. employees w

Question

On 1/1/14 the average number of years until retirement for Delco Co. employees was 10. The following additional information is for the year 2014 for the Delco corporation:

* used in calculating pension expense for 2014

1. If no credit for prior service was granted after 12/31/2013, how much was the balance of unamortized prior service cost for Delco on 1/1/14 ?

2. How much was the balance of unamortized prior service cost on 12/31/14?

3. On 12/31/14 Delco recorded a gain on pension plan assets of $15,000. The gain was deferred (i.e. not recognized as part of pension expense for 2014).

How much was the expected return on pension plan assets (used in calculating pension expense)?

4. How much was the minimum amount of gain to be amortized (i.e. included in pension expense) for 2014) using the corridor method?

Projected benefit obligation on 1/1/14. $8,400,000 Pension plan assets on 1/1/14 7,500,000 Cumulative unrecognized gain on pension plan asset (PPA) on 1/1/14. 900,000 Realized (i.e. actual) return on pension plan assets for 2014 528,000 Amortization of unrecognized prior service cost for 2014* 108,000 Amortization of net gain on for 2014* 36,000

Explanation / Answer

Answer:1 108000*10=1080000

Answer:2 31 dec 2014=1080000-108000=972000

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