1. A firm combines the asset gain or loss for a year with the PBO gain or loss for the year into one net pension gain or loss amount and then records that net amount in one JE. At the end of the current year, actual return on plan assets was $60,000 and the actuary reported an actuarial loss of $10,000. Plan assets at the beginning of the year totaled $800,000 and the expected rate of return is 6%. The year-end JE to record the current year's net pension gain or loss will include which of the following.

a. cr. pension expense 2,000

b. dr. pension liability 2,000

c. cr. pension gain/loss-OCI 10,000

d. dr. pension gain/loss-OCI 12,000

e. dr. pension gain/loss-OCI 2,000

2. PSC of $300,000 is recorded on 1/1/x6 from a plan amendment affecting 100 employees. The average service period of these employees is 10 years. On 12/31/x8, five employees retire. This is the first retirement since the amendment. By what amount will 20x9 pension expense increase as a result of the amendment if the firm uses the service method to amortize PSC?

a. 28,500

b. 30,000

c. 29,300

d. 20x9 pension expense will decrease, not increase

e. there will be no effect on 20x9 pension expense

3.The current year began with a $50,000 net pension loss in AOCI, and PBO of $200,000. The plan is funded only at the 25% level. The net pension gain for the current year is $40,000 (the net of the asset gain or loss and the PBO gain or loss). The firm uses corridor amortization with a 20 year average remaining service period. Determine the ending net gain or loss to be included in Dec. 31 AOCI for the current year.

a. 2,500 net gain

b. 10,000 net loss

c. 11,500 net loss

d. 7,500 net loss

e. 8,500 net loss