Samantha Co.has a defined benefit pension plan that has experienced differences between its expected and actual projected benefit obligation.Data on the plan as of January 1, 2010, follow:
$280,000\begin{array}{ll}\text { Unrecogrized net gain } & \$ 88,000 \\\text { Fair value of plan assets } & 250,000 \\\text { Actual projected benefit obligation } & 280,000\end{array}$
There was no difference between the company's expected and actual return on plan assets during 2010.The average remaining service life of the company's employees is 12 years.
Required:
Determine the amount of the net gain or loss to be included in pension expense for 2010 and indicate whether it is an increase or decrease in the pension expense calculation.

Question

Samantha Co.has a defined benefit pension plan that has experienced differences between its expected and actual projected benefit obligation.Data on the plan as of January 1, 2010, follow:

280,000\begin{array}{ll}\text { Unrecogrized net gain } & \$ 88,000 \\\text { Fair value of plan assets } & 250,000 \\\text { Actual projected benefit obligation } & 280,000\end{array}

There was no difference between the company's expected and actual return on plan assets during 2010.The average remaining service life of the company's employees is 12 years.
Required:
Determine the amount of the net gain or loss to be included in pension expense for 2010 and indicate whether it is an increase or decrease in the pension expense calculation.

Alonzo Calderon-Bostic · Accepted Answer

Final Answer :   Net gain deducted in pension expense calculation = $60, 000/12 years = $5, 000

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