Question

Pension data for Coda Corporation included the following for the current calendar year: Service cost $ 112,000 PBO, January 1 810,000 Plan assets, January 1 860,000 Amortization of prior service cost 6,600 Amortization of net loss 2,600 Discount rate, 8% Expected return on plan assets, 10% Actual return on plan assets, 12% Required: Determine pension expense for the year. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Pension expense $100,000

Step-by-step explanation:

The computation of the pension expense for the year is shown below:

Service cost $112,000

Interest cost $64,800 ($810,000 × 8%)

Amortization of prior service cost $6,600

Amortization of net loss $2,600

Less: Expected return on plan assets -$86,000 ($860,000 × 10%)

Pension expense $100,000