Question

A government contributes $20,000 to its pension plan for year 1. The actuarially-determined annual required contribution for year 1 was $27,000. The pension plan paid benefits of $16,400 and refunded employee contributions of $1,600 for year 1. What is the pension expenditure for the general fund for year 1?

Answer 1

Answer:

$20,000

Explanation:

Since the question is asking for the pension expenditure for the general fund in year 1 which is $20,000 only.  

This above amount reflects the contribution amount towards the pension plan in year 1. The other amount reflects the benefits, required contribution, refunded employee contributions which are of no use for recording the pension expenditure for the general fund.

The amount which is actually paid is only recognized.  

Hence, all other information which is mentioned is not relevant.