Cup of Joe Corporation provides its employees with a defined benefit pension plan.As of January 1,2011,the following balances exist:
$\begin{array}{ll}
\text { Accrued benefit obligation }&\$7,500,000\\
\text { Plan assets (at market value) } & 6,000,000 \\
\text { Unamortized past service cost from plan initiation } & 760,000 \\
\text { Unrecognized net loss from actuarial gains and losses } & 720,000 \\
\text { Interest rate on obligations } & 10 \%
\end{array}$ For the year ended December 31,2011,the current service cost,as determined by an appropriate actuarial cost method,was $440,000.A change in actuarial assumptions created a loss of $12,000 in 2011.The expected return on plan assets was $360,000.
However,the actual return is $341,000.The expected period of full eligibility at January 1,2011 (i.e.,the vesting period)is 10 years,while the expected average remaining service life is 15 years.Cup of Joe paid $996,000 to the pension trustee in December 2010.The company recognizes only the minimum amount of corridor amortization.
Requirement:
Calculate the pension expense for 2011 and determine the carry forward amount for unrecognized actuarial gains or losses at the end of 20ll.

Question

Cup of Joe Corporation provides its employees with a defined benefit pension plan.As of January 1,2011,the following balances exist:
 $\begin{array}{ll}
\text { Accrued benefit obligation }&\$7,500,000\\
\text { Plan assets (at market value) } & 6,000,000 \\
\text { Unamortized past service cost from plan initiation } & 760,000 \\
\text { Unrecognized net loss from actuarial gains and losses } & 720,000 \\
\text { Interest rate on obligations } & 10 \%
\end{array}$ For the year ended December 31,2011,the current service cost,as determined by an appropriate actuarial cost method,was $440,000.A change in actuarial assumptions created a loss of $12,000 in 2011.The expected return on plan assets was $360,000.
However,the actual return is $341,000.The expected period of full eligibility at January 1,2011 (i.e.,the vesting period)is 10 years,while the expected average remaining service life is 15 years.Cup of Joe paid $996,000 to the pension trustee in December 2010.The company recognizes only the minimum amount of corridor amortization.
Requirement:
Calculate the pension expense for 2011 and determine the carry forward amount for unrecognized actuarial gains or losses at the end of 20ll.

Quizplus · Accepted Answer

The Answer of Cup of Joe Corporation provides its employees with a defined benefit pension plan.As of January 1,2011,the following balances exist:
 $\begin{array}{ll}
\text { Accrued benefit obligation }&\$7,500,000\\
\text { Plan assets (at market value) } & 6,000,000 \\
\text { Unamortized past service cost from plan initiation } & 760,000 \\
\text { Unrecognized net loss from actuarial gains and losses } & 720,000 \\
\text { Interest rate on obligations } & 10 \%
\end{array}$ For the year ended December 31,2011,the current service cost,as determined by an appropriate actuarial cost method,was $440,000.A change in actuarial assumptions created a loss of $12,000 in 2011.The expected return on plan assets was $360,000.
However,the actual return is $341,000.The expected period of full eligibility at January 1,2011 (i.e.,the vesting period)is 10 years,while the expected average remaining service life is 15 years.Cup of Joe paid $996,000 to the pension trustee in December 2010.The company recognizes only the minimum amount of corridor amortization.
Requirement:
Calculate the pension expense for 2011 and determine the carry forward amount for unrecognized actuarial gains or losses at the end of 20ll.

Cup of Joe Corporation Provides Its Employees with a Defined