Question

Presented below is pension information for Company Y for 2021.

Expected return on plan assets: $72,000
Interest on vested benefits: $45,000
Service cost: $150,000
Interest on projected benefit obligation: $63,000
Amortization of prior service cost due to increase in benefits: $54,000

The amount of pension expense to be reported for 2021 is:______

Answer 1

The Amount of pension expense is $195,000

Step-by-step explanation:

The computation of the amount of pension expenses reported is shown below:

Service cost $150,000

Interest on projected benefit obligation 63,000

Amortization of prior service $54,000

Less: Expected return on plan assets -$72,000

The Amount of pension expense is $195,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered