Shroff Company has a defined benefit pension plan. The following data relate to the operation of the plan for 2019.

A. Prepare a pension worksheet and the journal entry to record the pension expense for 2019.

Plan assets (fair value), 1/1 $29,000

Projected benefit obligation, 1/1 35,000

Prior service cost, 1/1 2,600

unrecognized net gain/loss (debit), 1/1 4,800

Service cost 2,500

Actual gain on plan assets 1,500

Amortization of prior service cost 300

Annual contributions 3,400

Benefits paid 2,700

Settlement rate 5%

Expected rate of return 6%

Average service life of employees 10 yrs

B. Suppose plan assets of Shroff Company make about $5,000 more than expected in both 2020 and 2021. How would this affect Shroffs net income in 2020 and 2021 and why? From this example, what do you think is the main role of the AOCI in the current US pension accounting?