Current-year pension expense

Assignment Help Accounting Basics
Reference no: EM13127299

Carter Components is computing the components of its pension expense for the year ended December 31. Carter has calculated that its service costs are \$60,000 and has computed interest cost as \$42,000. The average remaining service life of employees is 8 years. The return on \$500,000 in plan assets was anticipated to be 8 percent but was actually 8.5 percent. The pension benefit obligation at the beginning of the year was \$560,000 and, at the end of the year, \$602,000. The company has an unrecognized gain of \$60,000. To what extent will the unrecognized gain reduce current-year pension expense?

a) \$25

b) \$500

c) \$750

d) \$1,250

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