Current-year pension expense

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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

Reference no: EM13127299

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