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Carter Components is computing the components of its pension

1. Carter Components is computing the components of its pension expense for the current year ended December 31. Carter has calculated that its service cost is $60,000 and has computed interest cost as $42,000. The average remaining service life of its 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

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Carter Components is computing the components of its pension expense for the current year ended December 31. Carter has calculated that its service cost is $60,000 and has computed interest cost as $42,000. The average remaining service life of its employees is 8 ...

Solution Summary

Carter Components is computing the components of its pension expense for the current year ended December 31. Carter has calculated that its service cost is $60,000 and has computed interest cost as $42,000. The average remaining service life of its 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

$2.19