Question

Can I get a step by step using the worksheet attached. Schiff Co. sponsors a defined benefit pension plan. For the current year, the expected return on plan assets was $100,000. The actual return was $150,000. The company’s actuary estimates an increase of $600,000 in the projected benefit obligation. The amount of the projected benefit obligation determined at year end reflected an increase of only $400,000. If no net gain (loss) was carried in accumulated OCI at the beginning of the year, the amount of net gain (loss) subject to required amortization for the current year is A. $0 B. $400,000 C. $50,000 D. $250,000

General Journal Entries Memo Record Annual Pension Expense DR OCI-Prior Service Cost (DR)/CR OCI Gain Loss (DRVCR Pension Asset Liability (DR)ICR Projected Benefit Plan Items Cash DR Obligation CR Assets DR Prior Service Cost Balance Service cost interest cost Actual/Expected return Unexpected gainloss Amortization of PSC Contributions Benefits Liabilty ncrease/decrease Amortization GL Journal entry for Accumulated OCI Balance

Answer 1

Schiff Co. in "$" Step 1: Calculation of Net Increase in estimated Obligation Expected increase in Projected benefit obligation 60000 Less: Expected Return on Plan Assets 100000 Net Increase in Estimated obligation 500000 Step 2: Calculation of Net Increase in Actual obligation Actual increase in Projected benefit obligation Less: Actual Return on Plan Assets Net Increase in Actual obligation 400000 TAKKKi Net gain in obligations (Step 1-Step 2) 250000 Hence, The correct option is D. $250000