Swifty Corp. sponsors a defined benefit pension plan for its employees. On Janua
ID: 2547199 • Letter: S
Question
Swifty Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances related to this plan.
As a result of the operation of the plan during 2017, the actuary provided the following additional data for 2017.
Using the preceding data, compute pension expense for Swifty Corp. for the year 2017 by preparing a pension worksheet that shows the journal entry for pension expense. (Enter all amounts as positive.)
Use the market-related asset value to compute the expected return and for corridor amortization.
Plan assets (market-related value) $483,000 Projected benefit obligation 737,000 Pension asset/liability 254,000 Cr. Prior service cost 85,000 Net gain or loss (debit) 96,000Explanation / Answer
The pension expense for a Year= Service cost+interest cost- expected a return on plant asset+amortization of prior Service cost+ Amortisation of Experience loss or gain.
$103,000+$24,000-$48,300+$4,770= $83,470
Corridor amortization= (Gaine or loss- Computed Corridor)/Average remaining service life.
Coridor=$483,000*10%(483000 taken because of question instruct so. go to the last line in question)
=($96,000-$48,300)/10= $4,770
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