Cup of Joe Corporation Provides Its Employees with a Defined

question 26

Essay

Cup of Joe Corporation provides its employees with a defined benefit pension plan.As of January 1,2011,the following balances exist:
$\begin{array}{ll}\text { Accrued benefit obligation }&\$7,500,000\\\\\text { Plan assets (at market value) } & 6,000,000 \\\\\text { Unamortized past service cost from plan initiation } & 760,000 \\\\\text { Unrecognized net loss from actuarial gains and losses } & 720,000 \\\\\text { Interest rate on obligations } & 10 \%\end{array}$ For the year ended December 31,2011,the current service cost,as determined by an appropriate actuarial cost method,was $440,000.A change in actuarial assumptions created a loss of $12,000 in 2011.The expected return on plan assets was $360,000.
However,the actual return is $341,000.The expected period of full eligibility at January 1,2011 (i.e.,the vesting period)is 10 years,while the expected average remaining service life is 15 years.Cup of Joe paid $996,000 to the pension trustee in December 2010.The company recognizes only the minimum amount of corridor amortization.
Requirement:
Calculate the pension expense for 2011 and determine the carry forward amount for unrecognized actuarial gains or losses at the end of 20ll.

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Definitions:

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Unfavorable or adverse results that may arise from a decision, action, or situation, impacting well-being or progress.

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The process by which extra neurons and synaptic connections are eliminated to increase the efficiency of neuronal transmissions.