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ezto.mheducation.com Econnect Intermediate Accounting 303: ACCT 303 01 Spring 20

ID: 2511126 • Letter: E

Question

ezto.mheducation.com Econnect Intermediate Accounting 303: ACCT 303 01 Spring 2018 ACCOUNTING Chapter 17 HW Question 22 (of 23) 22. 7.00 points The projected benefit obligation and plan assets were $170 million and $200 million, respectively, at the beginning of the year. Due primarly to favorable stock market performance in recent years, there also was a net gain of $65 million. On average, employees' remaining service life with the company is 10 years. As a result of the net gain, what was the increase or decrease in to be deducted should be indicated with a minus sign.) pension expense for the year? (Amounts ($ in millions) Net gan Corridor amount Excess, if any Service period (years) Check my work sc FI F3 F5

Explanation / Answer

corridor amount [10% ofPBO or 10% of plan asset whichever is higher ]

                               [10% of 170 =17   or 10%of 200 = 20 whichever is higher]

$ 4.5million will be amortised and subtracted from pension expense ,thus pension expense will be decreased.

Net Gain 65

corridor amount [10% ofPBO or 10% of plan asset whichever is higher ]

                               [10% of 170 =17   or 10%of 200 = 20 whichever is higher]

(20) excess if any 45 service period 10 Net gain amortisation to be deducted from pension expense 45/10 = 4.5