Reference no: EM131923457

Problem - Amortization of Accumulated Oci (g/l), Corridor Approach, Pension Expense Computation

The actuary for the pension plan of Gustafson Inc. calculated the following net gains and losses.

Incurred during the Year	(Gain) or Loss
2012	$300,000
2013	480,000
2014	(210,000)
2015	(290,000)

Other information about the company's pension obligation and plan assets is as follows.

As of January 1,	Projected Benefit Obligation	Plan Assets (market-related asset value)
2012	$4,000,000	$2,400,000
2013	4,520,000	2,200,000
2014	5,000,000	2,600,000
2015	4,240,000	3,040,000

Gustafson Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 5,600. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2012. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

Instructions - Prepare a schedule which reflects the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2012, 2013, 2014, and 2015. Apply the "corridor" approach in determining the amount to be amortized each year.