Maytag Service Co. reported the following for its defined-benefit pension plan for 2021: Settlement rate 3%
- ) Maytag Service Co. reported the following for its defined-benefit pension plan for 2021:
Settlement rate 3%
Expected rate of return on plan assets 6.5%
Service cost $750,000
Actual return on plan assets $460,000
Benefits paid to retirees $485,000
Average remaining service life of existing employees 10 years
Projected benefit obligation as of 12-31-20 $9,000,000
Fair value of plan assets as of 12-31-20 $8,500,000
Other comprehensive income – Prior Service Cost as of 12-31-20 $45,000 dr
Other comprehensive income – Gains/Loss as of 12-31-20 $924,000 dr
Maytag amortizes its prior service cost on a straight-line basis over the average remaining service life of its existing employees.
- Using the above information for Maytag, prepare a pension work sheet for 2021.
- Using the work sheet, prepare the
journal entry to reflect the accounting for the company's pension plan for the year ending 12-31-21. - Will Maytag need to record corridor amortization for 2022, yes or no?
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