Question

AMR Corporation (parent company of American Airlines) reported the following (in millions). Service Cost$366Interest on P.B.O. 737Return on Plan assets 593Amortization of prior service cost 13Amortization of net loss 154Compute AMR Corporation's pension expense. (Enter answer in millions. Do NOT include dollar sign. For example, if the answer is 123,000,000, then you will enter [123]).

Answer 1

Answer:

$677,000,000

Explanation:

The computation of pension expenses is shown below:-

Pension expenses = Service cost + Interest on PBO - Return on plan assets + Amortization of prior service cost - Amortization of net loss

= $366,000,000 + $737,000,000 - $593,000,000 + $13,000,000 - $154,000,000

= $677,000,000

Therefore for computing the pension expenses we simply applied the above formula so that the correct amount could come