Lee Company has a defined benefit pension plan During 2015
Lee Company has a defined benefit pension plan. During 2015, for the first time, Lee expericnced a difference between its expected and act in 1 projected benefit obligation. At the beginning of 2016, Lee’s actuary accumulated the following information related to lee’s pension plan:
Net Ion (1/1/2016) .................. $ 44,000
Actual projected benefit obligation (1/1/2016) ....... 228,000
Fair value of plan assets (1/1/2016) ............ 260,000
On December 31, 2016, lee Is in the process of computing the net gain or lass to include in its pension expense for 2016. lee his determined that the average remaining service life of its employees is 9 years. There was no difference between the company’s expected and actual return on plan assets in 2016.
Compute tire amount of the net gain or loss to include in the pension expense for 2016, assuming that Inc uses the corridor approach. Indicate whether it is an addition to or a subtraction from pension expense.
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