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Nikolay [14]
3 years ago
12

Kenseth Corp. has the following beginning-of-the-year present values for its projected benefit obligation and market-related val

ues for its pension plan assets.
Projected Plan
Benefit Assets
Obligation Value
2013 $2,000,000 $1,900,000
2014 2,400,000 2,500,000
2015 2,950,000 2,600,000
2016 3,600,000 3,000,000
The average remaining service life per employee in 2013 and 2014 is 10 years and in 2015 and 2016 is 12 years. The net gain or loss that occurred during each year is as follows: 2013, $280,000 loss; 2014, $90,000 loss; 2015, $11,000 loss; and 2016, $25,000 gain.
Using the corridor approach, compute the amount of net gain or loss amortized and charged to pension expense in each of the four years, setting up an appropriate schedule.
Year
Minimum Amortization of Loss
2013 $
2014 $
2015 $
2016 $
Business
1 answer:
antiseptic1488 [7]3 years ago
5 0

Answer:

Year Minimum Amortization of Loss

2013 $0

2014 $3,000

2015 $ $6,000

2016 $1,000

Explanation:

Computation of the amount of net gain or loss amortized and charged to pension expense in each of the four years.

Corridor and Minimum Loss Amortization

Year 2013

Projected Benefit Obligation (a) $2,000,000

Plan Assets $1,900,000

10%Corridor 200,000

(10%×$2,000,000)

AccumulatedOCI (G/L) (a) $0

Minimum Amortization of loss $0

(a) As of the beginning of the year

Year 2014

Projected Benefit Obligation (a) $2,400,000

PlanAssets $2,500,000

10%Corridor 250,000

(10%×$2,500,000)

AccumulatedOCI (G/L) (a) $280,000

Minimum Amortization of loss $3,000 (b)

(b) ($280,000-$250,000)÷10 years

=$30,000÷10 years

=$3,000

Year 2015

Projected Benefit Obligation (a) $2,950,000

PlanAssets $2,600,000

10%Corridor 295,000

(10%×$2,950,000)

AccumulatedOCI (G/L) (a) $367,000(c)

Minimum Amortization of loss $6,000 (d)

(c) ($280,000-$3,000+$90,000)

=$367,000

(d) ($367,000-$295,000)÷12 years

=$72,000÷12 years

=$6,000

Year 2016

Projected Benefit Obligation (a) $3,600,000

PlanAssets $3,000,000

10%Corridor 360,000

(10%×$3,600,000)

AccumulatedOCI (G/L) (a) $372,000(e)

Minimum Amortization of loss $1,000 (f)

(e) $367,000-$6,000+$11,000

=$372,000

(f) ($372,000-$360,000)÷12 years

=$12,000 ÷12 years

=$1,000

Therefore the amount of net gain or loss amortized and charged to pension expense in each of the four years are:

Year Minimum Amortization of Loss

2013 $0

2014 $3,000

2015 $ $6,000

2016 $1,000

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5. Po= 0.36

6. Pn = 0.04

7. 0.16

8. 1.11

9. 1.75

10. 9.9

Explanation:

5. Computation for the probability that April will not be working with a customer

Using this formula

Po=1-(Average number of arrival per hour/Average number of customer served per hour)

Let plug in the formula

Po= 1-(7/11 )

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Therefore the probability that April will not be working with a customer will be 0.36

6. Calculation for the probability of 5 customers in the system

Using this formula

Pn= (Average number of arrival per hour/Average number of customer served per hour)* Po

Let plug in the formula

Pn= (7/11)^5* 0.36

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Pn = 0.04 (Approximately)

Therefore the probability of 5 customers in the system will be 0.04

7. Calculation for the average time a customer spends waiting in line

Time spend Waiting in line=7^2/11(11 – 7) /7

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Therefore the average number of customers waiting in line will be 1.11

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Average customers in the system = 1.75

Therefore the average number of customers in the system will be 1.75

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Arrival rate = 9.9

Therefore the arrival rate in order for April to stay that busy will be 9.9

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