Sandhill Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2025 and 2026. Projected benefit obligation, January 1 Plan assets (fair value and market-related value), January 1 Pension asset/liability, January 1 Prior service cost, January 1 Service cost Settlement rate Expected rate of return Actual return on plan assets Amortization of prior service cost Annual contributions Benefits paid retirees Increase in projected benefit obligation due to changes in actuarial assumptions Accumulated benefit obligation at December 31 Average service life of all employees Vested benefit obligation at December 31 (a1) 2025 Amortization of the loss S $596,000 411,600 184,400 Cr. 161,400 40,300 10% 10% 35,800 69,500 97,300 31,200 87,100 720,200 Calculate the amortization of the loss (2026) using the corridor approach. 2026 $58,800 10% 10% 61,100 50,500 80,500 53,900 0 792,000 20 years 463,600
Sandhill Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the years 2025 and 2026. Projected benefit obligation, January 1 Plan assets (fair value and market-related value), January 1 Pension asset/liability, January 1 Prior service cost, January 1 Service cost Settlement rate Expected rate of return Actual return on plan assets Amortization of prior service cost Annual contributions Benefits paid retirees Increase in projected benefit obligation due to changes in actuarial assumptions Accumulated benefit obligation at December 31 Average service life of all employees Vested benefit obligation at December 31 (a1) 2025 Amortization of the loss S $596,000 411,600 184,400 Cr. 161,400 40,300 10% 10% 35,800 69,500 97,300 31,200 87,100 720,200 Calculate the amortization of the loss (2026) using the corridor approach. 2026 $58,800 10% 10% 61,100 50,500 80,500 53,900 0 792,000 20 years 463,600
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 4E
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Step 1: Steps need to be follow to calculate the amortization of the loss for 2026
VIEWStep 2: Calculation of the corridor:
VIEWStep 3: Calculation of the amount by which the accumulated unrecognized net loss exceeds the corridor:
VIEWStep 4: Calculation of the excess over the corridor that will be amortized:
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