Reference no: EM132580185

Smith, Inc. has a pension plan with the following data available for 20X1 and 20X2:

                                                                20X1                    20X2

Service cost                                   $30,000                $34,000

Interest cost                                    $18,000                     $20,000

Actual return on plan assets                 $15,000                         $21,600

Beginning of year plan assets                 $200,000                      $240,000

Discount rate                                         8%                                 8%

Expected return on plan assets                    8%                              8%

Question 1: If the market-related value of the plan assets is $260,000 at the beginning of 20X2, the beginning of the year projected benefit obligation is $250,000, the cumulative net actuarial gains in AOCI are $30,000 at the beginning of 20X1 and $28,250 at the beginning of 20X2, and the average remaining service period of active employees is 10 years, then the amortization of actuarial gains for 20X2 is:

Multiple Choice

Option 1: $225.

Option 2: $0.

Option 3: $2,600.

Option 4: $200.