Zenith Company, a Calendar-Year Entity, Amends Its Defined Benefit Pension

question 21

Multiple Choice

Zenith Company, a calendar-year entity, amends its defined benefit pension plan on January 1, 2013 and must recognize the increase in past service costs of its vested and non-vested employees as of that date in the calculation of its net 2013 pension expense (or revenue) . The pertinent facts as of January 1, 2013 are: $\begin{array}{llcc} \text { Increase in PSC-vested employees: } & \$5,000 \\ \text {Increase in PSC-non-vested employees: } &\$2,000\\ \text {Remaining vesting period-non-vested employees: } & \text {5 years}\\ \text {Remaining working life-vested employees: } &\text {10 years}\\ \text {Remaining working life-non-vested employees: } &\text {20 years}\\\end{array}$

-Calculate the past service costs included in 2013 net pension expense (or revenue) under U.S GAAP.

• A)$5,100
• B)$5,400
• C)$600
• D)$7,000

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