(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
2012
2012
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.