Question

Indigo Corporation had a projected benefit obligation of $3,386,000 and plan assets of $3,617,000 at January 1, 2020. Indigo also had a net actuarial loss of $528,020 in accumulated OCI at January 1, 2020. The average remaining service period of Indigo’s employees is 7.70 years.Compute Indigo’s minimum amortization of the actuarial loss.Minimum amortization of the actuarial loss

Answer 1

Answer:

Amortized to pension expense $21,600

Explanation:

Compututation of Indigo’s minimum amortization of the actuarial loss

Amortization

Projected benefit obligation($3,386,000)

Plan assets $3,617,000

Corridor percentage10%

Corridor amount $361,700

Accumulated loss $528,020

Excess loss subject to amortization $166,320

($361,700- $528,020)

Average remaining service 7.70

Amortized to pension expense $21,600

($166,320÷7.70)

Therefore the Minimum amortization of the actuarial loss will be $21,600