(Computation of Actual Return, Gains and Losses, Corridor Test, and Pension Expense)
Erikson Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan.
January 1 December 31
Vested benefit obligation $1,500 $1,900
Accumulated benefit obligation 1,900 2,730
Projected benefit obligation 2,500 3,300
Plan assets (fair value) 1,700 2,620
Settlement rate and expected rate of return 10%
Pension asset/liability 800 ?
Service cost for the year 2012 400
Contributions (funding in 2012) 700
Benefits paid in 2012 200
(If answer is zero, please enter a 0, do not leave any fields blank.)
(a) Compute the actual return on the plan assets in 2012.
(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2012. (Assume the January 1, 2012, balance was zero.)
(c) Compute the amount of net gain or loss amortization for 2012 (corridor approach).
(d) Compute pension expense for 2012.