On January 1, 2015, a Company Had $84,000 of Unrecognized

question 88

Multiple Choice

On January 1, 2015, 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: What amount of prior service cost should be included in pension expense for 2015?

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

---

Definitions:

Depreciation

The planned allocation of a physical asset's cost over the time it remains useful.

Merchandising Business

A type of business that purchases finished goods and sells them to consumers, typically at a retail level.

Revenue Account

An account that records the income a company generates from its normal business operations.

Inventory Cost

The total cost incurred to acquire, hold, and convert raw materials into finished goods, including costs of purchase, handling, and storage.