Robin Co Has a Defined Benefit Pension Plan That Has Experienced

question 11

Essay

Robin Co. has a defined benefit pension plan that has experienced differences between its expected and actual projected benefit obligation. Data on the plan as of January 1, 2016, follow: There was no difference between the company's expected and actual return on plan assets during 2016. The average remaining service life of the company's employees is 12 years.
Required:
Determine the amount of the net gain or loss to be included in pension expense for 2016 and indicate whether it is an increase or decrease in the pension expense calculation.

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Definitions:

Dividend Income

Income received by shareholders from the profits distributed by a company, usually in the form of cash payments.

Net Loss

The amount by which expenses exceed revenues.

Net Income

The amount of money remaining after all operating expenses, taxes, and dividends have been subtracted from total revenue.

Fair Value

An estimate of the price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.