Given the following information,what are the (unadjusted )operating profits and operating profits adjusted for pension liabilities and assets? (The amortized prior-year service cost and the amortization of losses are both zero. ) Operating revenues = $1,000
Operating costs = $600
Pension interest cost = $700
Expected return on pension plan assets = $500
Pension service cost = $150

Question

Quizplus · Accepted Answer

Unadjusted operating profits are calculated as operating revenues minus operating costs, which is $1,000 - $600 = $400. Adjusted operating profits account for pension costs, calculated as unadjusted operating profits minus pension service cost and pension interest cost plus expected return on pension plan assets: $400 - $150 - $700 + $500 = $600.

Given the Following Information,what Are the (Unadjusted )Operating Profits and Operating