In 2014, the Ballaster Company decided to amend its defined benefit pension plan. The amendment gave 7 employees the right to receive future benefits based upon their prior service. Ballaster's actuary determined that the prior service cost for this amendment amounts to $550,000. One employee will retire in 1 year, 2 expect to retire in 2 years, 1 in three years, 1 in 4 years, and 2 in five years.
Required:
Using the straight line method compute the following:
1) the remaining service life (round to 5 decimals)
2) prepare an amortization schedule to amortize the prior service cost

Question

Quizplus · Accepted Answer

The Answer of In 2014, the Ballaster Company decided to amend its defined benefit pension plan. The amendment gave 7 employees the right to receive future benefits based upon their prior service. Ballaster's actuary determined that the prior service cost for this amendment amounts to $550,000. One employee will retire in 1 year, 2 expect to retire in 2 years, 1 in three years, 1 in 4 years, and 2 in five years.
Required:
Using the straight line method compute the following:
1) the remaining service life (round to 5 decimals)
2) prepare an amortization schedule to amortize the prior service cost

In 2014, the Ballaster Company Decided to Amend Its Defined