Question

The following information is related to the defined benefit pension plan of Melissa Larson Company for the year: Service cost $ 94,000 Contributions to pension plan 147,000 Benefits paid to retirees 116,000 Plan assets (fair value), January 1 549,000 Plan assets (fair value), December 31 662,000 Actual return on plan assets 82,000 PBO, January 1 810,000 PBO, December 31 869,000 Discount rate 10 % Long-term expected return on plan assets 9 % Assuming no other relevant data exist, what is the pension expense for the year

Answer 1

Answer:

$125,590

Explanation:

Calculation for the pension expense for the year

Service cost$94,000

Add Interest cost (810,000 × 10%) $81,000

Less Expected return on plan assets ($49,410)

(549,000 × 9%)

Pension expense $125,590

Therefore the pension expense for the year is $125,590