Question

Presented below is pension information related to Woods, Inc. for the year 2013:

Service cost $92,000.00
interes on projected benefit obl $54,000.00
intrest on vested benefits 24000
Amoritzation of prior service
cost due to increase in benefits $12,000.00
Expected return on plant assets $18,000.00

The amount of pension expense to be reported for 2013 is ___________.

Answer 1

The pension expense for 2013 is $140,000.

Step-by-step explanation:

The pension expense for 2013 can be calculated using the formula: Service Cost + Interest on Projected Benefit Obligation - Expected Return On Plan Assets + Amortization of Prior Service Cost.

Plugging in the given numbers, the calculation would be:

• Service Cost: $92,000
• Interest on Projected Benefit Obligation: $54,000
• Interest on Vested Benefits: $24,000
• Amortization of Prior Service Cost due to increase in benefits: $12,000
• Expected Return on Plan Assets: $18,000

Using these values, the pension expense for 2013 would be:

Pension Expense = $92,000 + $54,000 - $18,000 + $12,000 = $140,000