E20-17b (amortization of accumulated oci (g/l)) central innovations

E20-17B (Amortization of Accumulated OCI (G/L)) Central Innovations Company sponsors a definedbenefit pension plan for its 175 employees. The company’s actuary provided the following information about the plan.

                                                                                 January 1                                   December 31           

                                                                                     2014                       2014                                  2015

Projected benefit obligation                              $1,650,000             $2,150,000                    $2,680,000

Accumulated benefit obligation                          1,400,000               1,710,000                       2,165,000

    Plan assets (fair value and market related

asset value)                                                            1,350,000                1,900,000                      2,350,000

Accumulated net (gain) or loss (for purposes

of the corridor calculation)                                          –0–                     (150,000)                        (215,000)

Discount rate (current settlement rate)                                                       10%                                  8%

Actual and expected asset return rate                                                          6%                                  6%

The average remaining service life per employee is 7 years. The service cost component of net periodic pension expense for employee services rendered amounted to $175,000 in 2014 and $220,000 in 2015.

Accumulated OCI (PSC) on January 1, 2014, was $525,000. No benefits have been paid.

Instructions

(Round to the nearest dollar.)

(a) Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2014 and 2015.

(b) Prepare a schedule which reflects the amount of accumulated OCI (G/L) to be amortized as a component of net periodic pension expense for 2014 and 2015.

(c) Determine the total amount of net periodic pension expense to be recognized by Central Innovations Company in 2014 and 2015.