“Amortization of prior service cost using years-of-service method.On January 1, 2010, Krupka LLC amended its pension plan which caused an increase of $6,000,000 in its projected benefit obligation. The company has 400 employees who are expected to receive benefits under the company’s defined-benefit pension plan. The personnel department provided the following information regarding expected employee retirements:
Expected Retirements
Number of Employees On December 3140 2010120 201160 2012160 201320 2014400
The company plans to use the years-of-service method in calculating the amortization of prior service cost as a component of pension expense.
Instructions
Prepare a schedule which shows the amount of annual prior service cost amortization that the company will recognize as a component of pension expense from 2010 through 2014.”