Zephyr Plc Amends Its Defined Pension Plan on January 1

question 62

Multiple Choice

Zephyr plc amends its defined pension plan on January 1, 2012, resulting in £420,000 of past service cost.The company has 400 active employees, of which 100 vest immediately (25%) and the other 300 (75%) vest in four years.The unrecognized past service cost applicable to the vested employees is £105,000 and vests immediately.The unrecognized past service cost related to the unvested employees is £315,000 and is amortized over five years.How much would Dawson report as amortization of past service costs in 2012?

• A)£63,000
• B)£126,000
• C)£105,000
• D)£168,000

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