Smith, Inc -The Deferred Gain or Loss from the Return on Plan

Smith, Inc. has a pension plan with the following data available for 2014 and 2015:
$\begin{array}{lcc}&2014&2015\\\text { Service cost } & \$ 30,000 & \$ 34,000 \\\text { Interest cost } & \$ 18,000 & \$ 20,000 \\\text { Actual return on plan assets } & \$ 15,000 & \$ 21,600 \\\text { Beginning of year plan assets } & \$ 200,000 & \$ 240,000 \\\text { Settlement rate } & 8 \% & 8 \% \\\text { Expected return on plan assets } & 8 \% & 8 \%\end{array}$
-The deferred gain or loss from the return on plan assets for 2015 is

A) $0.
B) $2,400 deferred gain.
C) $2,400 deferred loss.
D) unknown from information provideD. $\begin{array}{lr}\text { Expected return on plan assets } & \$ 19,200 \\\text { Actual return on plan assets } & \underline{21,600} \\\text { Deferred gain } & \$ 2,400\end{array}$

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free