On January 1, 2010, a Company Had $84, 000 of Unrecognized

question 41

Multiple Choice

On January 1, 2010, a company had $84, 000 of unrecognized prior service cost.The years-of-future-service method of amortization is used.The company has seven employees, as indicated below: $\begin{array}{ll}&\text {Expected Years of}\\\text {Employee}&\text {Future Service}\\\mathrm{A} & 3 \\\mathrm{~B} & 5 \\\mathrm{C} & 5 \\\mathrm{D} & 6 \\\mathrm{E} & 6 \\\mathrm{~F} & 8 \\\mathrm{G} & 9\end{array}$
What amount of prior service cost should be included in pension expense for 2010?

• A)$ 2, 000
• B)$ 9, 333
• C)$12, 000
• D)$14, 000

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Definitions:

Raw Materials Inventory

The stock of basic materials required in the production process before they are processed.

Accounts Payable

This term refers to the amount of money that a company owes to its suppliers or creditors for goods and services purchased on credit.

Process Costing System

An accounting method used where identical units are mass-produced, assigning average costs to each unit, making it easier to track and manage costs.

Direct Material Costs

Costs of raw materials or parts that directly go into producing products.