Matilda, Inc

question 48

Essay

Matilda, Inc.amended its defined benefit pension plan as of January 1, 2010.Matilda received a report from its actuary stating that at the beginning of 2010 unrecognized prior service cost resulting from the amendment amounted to $144, 000.The company's work force was composed of twelve people.Four were expected to retire at the end of 2012.Two were expected to retire at the end of 2014, two more at the end of 2016, and four at the end of 2018.
Required:
Using the years-of-future-service method, compute the amount of prior service cost to be amortized in the first year.

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Definitions:

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Dispatching Rule

A criterion used in manufacturing and other operations to prioritize and allocate resources to tasks, often to optimize production flow or minimize waiting time.

Processing Time

The duration required to complete a specific task or operation, often used in manufacturing and computer science.

Work Centre

A specific location where work tasks are performed, often designated for a particular process or operation within a manufacturing or office environment.