Question

Presented below is information related to Jensen Inc. pension plan for 2013.

Service cost $1,100,000 Actual return on plan assets 210,000 Interest on projected benefit obligation 390,000 Amortization of net loss 90,000 Amortization of prior service cost due to increase in benefits 165,000 Expected return on plan assets 180,000

What amount should be reported for pension expense in 2013?

a. $1,565,000
b. $1,535,000
c. $1,715,000
d. $1,355,000

Answer 1

a. $1,565,000

Step-by-step explanation:

The amount should be reported for pension expense in 2013:

= (sevice cost + Interest on projected benefit obligation + Amortization of prior service cost due to increase in benefits -Expected return on plan assets + Amortization of net loss)

= ($1,100,000 + 390000 + $165000 - $180000 + $90000)

= $1565000

Therefore, The amount should be reported for pension expense in 2013 is $1565000.