Question
7,Wildhorse, Inc. has a defined-benefit pension plan covering its 50 employees. Wildhorse agrees to amend its pension benefits. As a result, the projected benefit obligation
7,Wildhorse, Inc. has a defined-benefit pension plan covering its 50 employees. Wildhorse agrees to amend its pension benefits. As a result, the projected benefit obligation increased by $3105000. Wildhorse determined that all its employees are expected to receive benefits under the plan over the next 5 years. In addition, 10 employees are expected to retire or quit each year. Assuming that Wildhorse uses the years-of-service method of amortization for prior service cost, the amount reported as amortization of prior service cost in year one after the amendment is
$828000.
$1035000.
$621000.
$310500.
8,Gains and losses that relate to the computation of pension expense should be
amortized over a 15-year period.
recorded currently as an adjustment to pension expense in the period incurred.
recorded only if a loss is determined.
recorded currently and in the future by applying the corridor method which provides the amount to be amortized.
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