Chapter 17, Problem 17.31E

(1)

To determine

Amortized prior service cost: This is the reduction on the change in pension plan earned in prior years and is recognized over the future service of employee.

Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.

Pension expense includes the following components:

• Service cost
• Interest cost
• Expected return on plan assets
• Amortization of prior service cost
• Amortization of net loss or net gain

Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

To calculate: The amount of prior service cost to be amortized to pension expense in each of the next 10 years.

(2)

To determine

To Calculate: The amount of prior service cost to be amortized to pension expense in each of the next 10 years.