Reference no: EM132740111

The following information relates to the defined benefit pension for the Milan Company for the year ending December 31, 2014:

PV of benefit obligation, January 1       P6,700,000

PV of benefit obligation, December        317,200,000

Fair value of plan assets, January        17,500,000

Fair value of plan assets, December     317,900,000

Expected return on plan assets              675,000

Amortization of deferred gain                48,750

Employer contribution                        300,000

Benefits paid to retirees                  600,000

Settlement rate                             10%

Problem 1: How much would be the the actual return on plant assets?

Option 1: P795,000
Option 2: P755,250
Option 3: P700,000
Option 4: P157,500