Question

Colombo Enterprises has a defined benefit pension plan. At the end of the reporting year, the following data were available: beginning PBO, $75,000; service cost, $14,000; interest cost, $6,000; benefits paid for the year, $9,000; ending PBO, $89,000; and the expected return on plan assets, $10,000. There were no other pension-related costs. The journal entry to record the annual pension costs will include a debit to pension expense for: Multiple Choice $20,000. $15,000. $12,000. $10,000..

Answer 1

Answer:

Option D. $10,000 is the correct answer.

Explanation:

Journal Entry for pension expenses:

Pension Expense                                  $10,000

     Cash                                                 $10,000

(To record pension expenses)

Pension expenses for the year ended is comprised of the following components of pension cost.

Service Cost                                           $14,000

Interest cost                                            $6,000

Expected return on plan assets            $10,000

                                                            __________

Pension expenses                                  $10,000