QUESTION 1 Red Raider Company has the following information available as of Janu

Question

QUESTION 1 Red Raider Company has the following information available as of January 1, 2019: Projected benefit obligation. (Pension) plan assets at fair value $100,000 90,000 A review of records reveals the following: 2016 net pension los. 2017 net pension gain 2018 net pension los. 1/1/2019 accumulated net pension loss.$15,000 [4,000- 1,000+ 12,000 .4,000 1,000 $12,000 Pension gains and losses are the result of a combination of assumptions changes increasing or decreasing the Projected Benefit Obligation and/or the actual return on pension plan assets being different from the expected return on pension plan assets. Using corridor amortization, determine the minimum amount of accumulated net pension loss to be amortized into pension expense (cost) during 2019. Assume the average remaining service life of employees covered by the plan is 10 years. Place your answer on the line below and show and label your work below the line. Answer

Explanation / Answer

Solution:-

Projected Benefit Obligation = 100000

Plan Asset = 90000

Corridor (100000*10%) = (10000)

Beginning Accumulated Loss= (15000)

Minimum Accumulated Loss = [Beginning Acc Gain/loss - Corridor] / Remaining service life

= [(-15000) - (-10000)] / 10

= -5000/10 = (500)

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