Answered: Oriole estimates that the average…

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 6MC

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Testbank Exercise 112

The following information is for the pension plan for the employees of Oriole, Inc.

	12/31/20		12/31/21
Accumulated benefit obligation	$2,740,000		$3,700,000
Projected benefit obligation	3,040,000		3,940,000
Fair value of plan assets	3,070,000		3,570,000
AOCI - Net (gain) or loss	(365,000)	(420,000)
Settlement rate	7%		7%
Expected rate of return	6%		5%

Oriole estimates that the average remaining service life is 15 years. Oriole's contribution was $472,000 in 2021 and benefits paid were $230,000.

Calculate the interest cost for 2021.

Interest cost for 2021

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Calculate the actual return on plan assets in 2021.

Actual return on plan assets for 2021

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Calculate the unexpected gain or loss in 2021.

Unexpected gain or loss in 2021

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Calculate the corridor for 2021 and the amortization of the net gain for 2021. (Round answers to 0 decimal places, e.g. 5,275.)

Corridor for 2021		$
Amortization of the net gain for 2021		$

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