Skysong Company has five employees participating in its defined benefit pension plan. Expected years of future...
Skysong 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 |
Future Years of Service |
|
| Jim | 3 | |
| Paul | 4 | |
| Nancy | 5 | |
| Dave | 6 | |
| Kathy | 6 |
On January 1, 2017, the company amended its pension plan,
increasing its projected benefit obligation by $82,800.
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 |
|
Homework Answers
| Jim | Paul | Nancy | Dave | Kathy | Total | |
| 2017 | 1 | 1 | 1 | 1 | 1 | 5 |
| 2018 | 1 | 1 | 1 | 1 | 1 | 5 |
| 2019 | 1 | 1 | 1 | 1 | 1 | 5 |
| 2020 | 1 | 1 | 1 | 1 | 4 | |
| 2021 | 1 | 1 | 1 | 3 | ||
| 2022 | 1 | 1 | 2 | |||
| Total | 3 | 4 | 5 | 6 | 6 | 24 |
| Cost per Service-Year | 3450 | =82800/24 | ||||
| Year | Annual Amortization | |||||
| 2017 | 17250 | =3450*5 | ||||
| 2018 | 17250 | =3450*5 | ||||
| 2019 | 17250 | =3450*5 | ||||
| 2020 | 13800 | =3450*4 | ||||
| 2021 | 10350 | =3450*3 | ||||
| 2022 | 6900 | =3450*2 |
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Skysong Company has five employees participating in its defined
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