The following is partial information related to Stanley Ltd.’s non-pension, post-retirement benefit plan at December 31, 2011:

The following is partial information related to Stanley Ltd.’s non-pension, post-retirement benefit plan at December 31, 2011:

Accrued post-retirement benefit obligation, accounting basis ……………$190,000

Accrued post-retirement benefit obligation, funding basis ……………...    160,000

Plan assets (at fair value) ………………………………………………… 130,000

Past service cost arising in current year ………………………………….       12,000

Transitional liability arising in current year ……………………………..   20,000

Amortization expenses of $1,000 and $3,000 were incurred in the year related to the past service costs and transitional liability, respectively.

Instructions

(a) Prepare a schedule reconciling the funded status with the asset/liability reported on the balance sheet at December 31, 2011, assuming that Stanley Ltd. applies the deferral and amortization approach.

(b) Prepare a schedule reconciling the funded status with the asset/liability reported on the balance sheet at December 31, 2011, assuming that Stanley Ltd. applies the immediate recognition approach.

(a) Accrued post-retirement benefit obligation

      (Credit)                                   $(190,000)

    Plan assets at fair value (Debit)             130,000

    Funded status (Credit)                         (60,000 )

    Unrecognized past service cost (Debit) *      ( 11,000

    Unrecognized transition amount (Debit) **      17,000

    Accrued post-retirement benefit liability (Credit) $ (32,000    )

    * $12,000 – $1,000 (amortization)

    ** $20,000 – $3,000 (amortization)

 (b)                                                             

    Accrued post-retirement benefit obligation

      (Credit)                                   $(160,000)

    Plan assets at fair value (Debit)             130,000

    Funded status (Credit)                       $ (30,000 )