Question

1. Hall of Fame Co. has a defined benefit pension plan. Two alternative possibilities for pension-related data for the current calendar year are shown below:     

	Case 1		Case 2
Net loss (gain), Jan. 1	$(212,400)		$194,000
Loss (gain) on plan assets	(5,200)		1,200
Loss (gain) on PBO	11,200		(212,000)
PBO, Jan. 1	(1,620,000)		(1,520,000)
Plan assets, Jan.1	1,920,000		1,370,000
Average remaining service period of active employees (years)	12		10

For each independent case, calculate amortization of the net loss or gain that should be included as a component of pension expense for the current year. (4 points)

Answer 1

	Case-1	Case-2
Net loss or gain , Jan.1	212,400	194,000
Less: 10% of Higher of PBO or Plant assets of Jan.1	192,000	152,000
Balance Amount	20,400	42,000
/ Average Remaining Service period	12	10
Amortization of net gain or loss	$ 1,700	$ 4,200