Amortization of Unrecognized Gain on the Pension Fund
Melba Enterprises has an unrecognized gain of $425,000 relating to its pension plan as of January 1, 2008. Management has chosen to amortize this deferral on a straight-line basis over the 10-year average remaining service life of its employees, subject to the limitation of the corridor amount. Additional facts about the pension plan as of January 1, 2008, are as follows:
|
PBO
|
$2,050,000
|
|
ABO
|
1,900,000
|
|
Fair value of the pension fund
|
1,500,000
|
|
Market-related value of the pension fund (5-year weighted average)
|
1,350,000
|
Compute the minimum amortization of unrecognized gain to be recognized by Melba in 2008.