Question

The service cost component of pension expense for 2015 is $890,000 and the amortization of prior service cost due to an increase in benefits is $180,000. The settlement rate is 10% and the expected rate of return is 8%. What is the amount of pension expense for 2015?

Answer 1

amount of pension expense = $1,730,000

Step-by-step explanation:

given data

pension expense = $890,000

benefits = $180,000

settlement rate = 10%

expected rate of return = 8%

to find out

amount of pension expense

solution

we get here amount of pension expense that is express as

amount of pension expense = pension expense + benefits + 10% of projected benefit + 8% of pension assets ................1

from attach file we get these

put here value we get

amount of pension expense = $890,000 + $180,000 + 10% of $11,400,000 + 8% of $6,000,000

amount of pension expense = $1,730,000