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question vickie plato accounting clerk in the personnel office ofstreisand corp has 4288851


Vickie Plato, accounting clerk in the personnel office ofStreisand Corp., has begun to compute pension expense for 2016 butis not sure whether or not she should include the amortization ofunrecognized gains/losses. She is currently working with thefollowing beginning-of-the-year present values for the projectedbenefit obligation and market-related values for the pensionplan:

Projected Plan

Benefit Assets

Obligation Value

2013 $2,200,000 $1,900,000

2014 2,400,000 2,500,000

2015 2,900,000 2,600,000

2016 3,900,000 3,000,000

The average remaining service life per employee in 2013 and 2014is 10 years and in 2015 and 2016 is 12 years. The net gain or lossthat occurred during each year is as follows.

2013 $280,000 loss

2014 85,000 loss

2015 12,000 loss

2016 25,000 gain

Answer the following questions in the Discussion Board:

You are the manager in charge of accounting. Write a memo toVickie Plato, explaining why in some years she must amortize someof the net gains and losses and in other years she does not needto. In order to explain this situation fully, you must compute theamount of net gain or loss that is amortized and charged to pensionexpense in each of the 4 years listed above. Include an appropriateamortization schedule, referring to it whenever necessary.

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