Difference Between Actual and Expected Return on Pension Fund As of January 1, the company had the following pension-related balances:
Projected benefit obligation (PBO)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
$(15,000)
Fair value of pension fund                                                        Â
$17,000
Unrecognized net pension (gain)/loss                                                Â
$(1,100)
Discount rate for the PBOÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
8%
During the year, service cost was $1,500. The actual return on the pension fund was $700. Compute pension expense for the year and the ending balance in unrecognized net pension (gain)/loss assuming that (1) the expected return on the pension fund is 10% and (2) the expected return on the pension fund is 12%.