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    Talley, Inc. Pension Plan: Pension expense for year 7 & 8

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    Talley, Inc. Pension Plan Year 7 Year 8
    Service cost 15,000 17,000
    Interest cost 9,000 10,000
    Actual return on plan assets 7,500 10,800
    Beginning of year plan assets 100,000 120,000
    Settlement rate 8% 8%

    What is Talley's pension expense to be recorded for Year 7? (Hint: The expected return on plan assets equals beginning of year plan assets times the settlement rate.)
    $15,000
    $16,000
    $16,500
    $24,000

    What is Talley's pension expense to be recorded for Year 8? (Hint: The expected return on plan assets equals beginning of year plan assets times the settlement rate.)
    $16,200
    $17,000
    $17,400
    $27,000

    What is Talley's deferred gain or loss from the return on plan assets for Year 7?
    $0
    $500 deferred gain
    $500 deferred loss
    Unknown from information provided

    What is Talley's deferred gain or loss from the return on plan assets for Year 8?
    $0
    $1,200 deferred gain
    $1,200 deferred loss
    Unknown from information provided

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    https://brainmass.com/business/accounting/talley-inc-pension-plan-pension-expense-for-year-7-8-448707

    Solution Preview

    What is Talley's pension expense to be recorded for Year 7? (Hint: The expected return on plan assets equals beginning of year plan assets times the settlement rate.)
    $15,000
    ***$16,000
    $16,500
    $24,000

    OTA comment:
    + service cost $15,000
    + interest cost $9,000
    - expected return on assets 100,000 x 8% = 8,000
    = end $16,000

    What ...

    Solution Summary

    Your tutorial indicates the best choice and the computes the amount in detail so you can reconstruct it for yourself.

    $2.19

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