Response to the following :
Years-of-Future-Service Amortization Refer to the information provided in problem-1.
Required
Using the years-of-future-service method, prepare a set of schedules to determine (1) the amortization fraction for each year, and (2) the amortization of the prior service cost.
Problem-1
Straight-Line Amortization At the beginning of 2010, the Brent Company amended its defined benefit pension plan. The amendment entitled five active participating employees to receive increased future benefits based on their prior service. The company's actuary determined that the prior service cost for this amendment amounts to $330,000. Employee A is expected to retire after one year, employee B after two, employee C after three, employee D after four, and employee E after five years.
Required
Using the straight-line method, (1) compute the average remaining service life, and (2) prepare a schedule to amortize the prior service cost.