Final answer:
The correct formula to calculate pension expense is F = D + B - E + A + C, where the pension expense is increased by service cost, interest cost, and prior service cost amortization, and reduced by the expected return on plan assets, adjusted for recognized gains or losses.
Step-by-step explanation:
The correct equation for the calculation of pension expense is reflected in the terms provided. Pension expense (F) is typically calculated as the sum of service cost (D), interest cost (B), and amortization of unrecognized prior service cost (A), reduced by the expected return on plan assets (E), and adjusted for the recognition of gains or losses (C). Therefore, the correct formula is F = D + B - E + A + C. This equation takes into account the normal costs associated with providing pensions (service cost), the interest accruing on the pension obligation (interest cost), the effects of past services not yet recognized in financial statements (prior service cost amortization), the expected income from investing the pension funds (expected return on plan assets), and any recognized gains or losses from plan experience different from assumptions or changes in assumptions.