In the calculation of pension expense, how does payment of benefits to retiring employees affect net income and other comprehensive income?

a. It decreases both.

b. It decreases only other comprehensive income.

c. It decreases only net income.

d. It decreases neither.

During the current year, a company grants a retroactive retirement benefit increase for past service. In the calculation of the current period's pension expense, how does the granting of the benefit affect net income and other comprehensive income?

a. It decreases neither.

b. It decreases both.

c. It decreases only net income.

d. It decreases only other comprehensive income.

At the beginning of the current year, Ross Company has a fair value of its plan assets of $100,000. Ross expects an 8% return on investing the plan assets. The actual return was 7%. Which of the following statements is true due to the expectations and actual results described?

a. Pension expense is increased by $1,000.

b. Pension expense is reduced by $8,000.

c. Pension expense is increased by $8,000.

d. Pension expense is reduced by $7,000.