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.