Question

Bissell Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 500,000 Balance, January 1 $ 258,000 Service cost 198,000 Actual return 33,000 Interest cost 36,000 Annual contribution 119,000 Benefits paid (87,000 ) Benefits paid (87,000 ) Balance, December 31 $ 647,000 Balance, December 31 $ 323,000 The long-term expected rate of return on plan assets is 10%. Assuming no other data are relevant, what is the pension expense for the year

Answer 1

Answer:

$205,200

Explanation:

              Calculation of Pension Expense

Service Cost                                         $198,000

Interest cost                                          $33,000

Expected return on the plan assets    ($25,800) (258000*10%)

Pension Expense                                  $205,200

So therefore, the pension expense for the year is $205,200.