1 —Pension calculations. Montoya Company has available the following information about its defined-benefit pension plan for the year ending December 31, 2015: Service cost for 2015                                                                         $  25,000 Accumulated benefit obligation                                                            683,000 Plan assets at fair value                                                                        630,000 Accumulated OCI (PSC)                                                                      300,000 Vested benefit obligation                                                                       505,000 Market-related asset value                                                                   725,000 Projected benefit obligation                                                                  845,000 Accumulated OCI net gain                                                                     90,000 Interest on projected benefit obligation                                                   64,000 Instructions (a) Calculate the pension asset / liability to be recorded at December 31, 2015. (b) Calculate the 2016 amortization of the net gain. The average remaining service life of employees is 10 years. 2 —Pension plan calculations. The following information is for the pension plan for the employees of Payne, Inc. 12/31/14 12/31/15 Accumulated benefit obligation                      $2,800,000         $3,760,000 Projected benefit obligation                              3,100,000           4,000,000 Fair value of plan assets                                   3,130,000           3,630,000 AOCI – Net (gain) or loss                               (425,000)               (480,000) Settlement rate                                                      8%                        8% Expected rate of return                                          7%                       6% Payne estimates that the average remaining service life is 15 years. Payne’s contribution was $520,000 in 2015 and benefits paid were $260,000. Instructions (a)     Calculate the interest cost for 2015. (b)     Calculate the actual return on plan assets in 2015. (c)     Calculate the unexpected gain or loss in 2015. (d)     Calculate the corridor for 2015 and the amortization of the net gain for 2015. 3 —Pension plan calculations and entries. Selected Information about the pension plan of Roman Co. is as follows: 12/31/14 12/31/15 Accumulated benefit obligation                                           $4,700,000            $4,930,000 Projected benefit obligation                                                   4,950,000              5,150,000 Accumulated OCI (PSC)                                                       1,800,000              1,500,000 Fair value of plan assets                                                        4,750,000              4,950,000 Pension expense                                                                   1,000,000              1,700,000 Contribution                                                                               985,000              1,350,000 Discount rate (for year)                                                                    9%                         8% Instructions (a)    What is the corridor for 2015? (b)    Calculate the pension asset / liability at December 31, 2015. (c)    Prepare the entry for 2015 to record the pension expense and contribution. 4 —Corridor amortization. Explain corridor amortization. amortize these gains and losses. 5 —Corridor approach (amortization of net gains and losses.) Gibbs Company has 200 employees who are expected to receive benefits under the company’s defined-benefit pension plan. The total number of service-years of these employees is 2,000. The actuary for the company’s pension plan calculated the following net gains and losses: For the Year Ended December 31 (Gain) Or Loss 2014                         …

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