Buffalo Corporation amended its pension plan on January 1, 2017, and granted $166,400 of prior service costs to its employees. The employees are expected to provide 2,080 service years in the future, with 350 service years in 2017.Compute prior service cost amortization for 2017.

The prior service cost amortization for 2017 is $28,000

Explanation:

Given:

Amount granted = $166,400

Services per year = 2080

number of services in 2017 = 350

Prior service cost in 2017, PST = ?

Amount per service = $166,400 / 2080

                                 = $80

Amount in the year 2017, PST = $80 X 350

                                          PST = $28,000

Therefore, prior service cost amortization for 2017 is $28,000

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