Amortization of unrecognized gain on the pension fund

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Amortization of Unrecognized Gain on the Pension Fund

Melba Enterprises has an unrecognized gain of $425,000 relating to its pension plan as of January 1, 2008. Management has chosen to amortize this deferral on a straight-line basis over the 10-year average remaining service life of its employees, subject to the limitation of the corridor amount. Additional facts about the pension plan as of January 1, 2008, are as follows:

PBO                                                                     

$2,050,000

ABO                                                                    

1,900,000

Fair value of the pension fund                                                   

1,500,000

Market-related value of the pension fund (5-year weighted average)                       

1,350,000

Compute the minimum amortization of unrecognized gain to be recognized by Melba in 2008.

Reference no: EM13553629

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