Problem - Determining the amortization of net gain
Herring Wholesale Company has a defined benefit pension plan. On January 1, 2016, the following pension - related data were available:
Net gain - AOCI $170
Accumulated benefit obligation $1,170
Projected benefit obligation $1,400
Fair value of plan assets $1,100
Average remaining service period of active employees (expected to remain constant for the next several years) 15 years
The rate of return on plan assets during 2016 was 9%, although it was expected to be 10%. The actuary revised assumptions regarding the PBO at the end of the year, resulting in a $23,000 decrease in the estimate of that obligation.
Required:
1. Calculate any amortization of the net gain that should be included as a component of net pension expense for 2016.
2. Assume the net pension expense for 2016, not including the amortization of the net gain component, is $325,000. What is pension expense for the year?
3. Determine the net loss ---AOCI or net gain---AOCI as of January 1, 2017.