Question

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). ($ in millions) debit (Credit) PBO Plan Assets Prior Service Cost Net(Gain)loss Pension Expense Cash Net Pension (Liability)/Asset Beginning balance (580 ) 82 Service cost 86 Interest cost Expected return on assets (31 ) Gain/loss on assets (6.00 ) Amortization of: Prior service cost (14 ) Net gain/loss Loss on PBO (33 ) 33 Contributions to fund (80 ) Retiree benefits paid 59 (59 ) Ending balance (667 ) 334 78 102 (333 ) What is OTC's pension expense for the year

Answer 1

OTC's pension expense for the year is $35 million

Step-by-step explanation:

Pension expense for the year = Service cost + Interest cost - Expected return on assets + Amortization of: prior service + Amortization net loss

Service cost = 86

Interest cost = (-667 + 580 + 86 + 33 - 59) = (27)

Expected return on assets = (31)

Amortization of Prior service = 14

Amortization of net loss = (102 - 82 + 6 - 33) = (7)

Pension expense = (86 - 27 - 31 + 14 - 7)

= 35 ($ in millions)