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Flounder Corporation amended its pension plan on January 1, 2020, and granted $164,320 of prior service costs to its employees
Flounder Corporation amended its pension plan on January 1, 2020, and granted $164,320 of prior service costs to its employees. The employees are expected to provide 2,080 service years in the future, with 320 service years in 2020.
Compute prior service cost amortization for 2020.
Prior service cost amortization for 2020
$enter the prior service cost amortization for 2017 in dollars
Expert Solution
Computation of Prior Service Cost Amortization for 2020:
Given,
Total Prior Service Costs to its Employees = $164,320
Expected Number of Service Years in the Future = 2,080 service years
Number of Service Years in 2020 = 320 service years
Prior service cost each service year = $164,320/2,080 = $79
Prior service cost amortization for 2020 = $79 * 320 = $25,280
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