Question

Sweet Company provides the following information about its defined benefit pension plan for the year 2020.Service cost $ 89,400Contribution to the plan 105,700Prior service cost amortization 10,800Actual and expected return on plan assets 64,500Benefits paid 40,200Plan assets at January 1, 2020 640,200Projected benefit obligation at January 1, 2020 710,100Accumulated OCI (PSC) at January 1, 2020 152,200Interest/discount (settlement) rate 10 %Compute the pension expense for the year 2020.

Answer 1

$106,710

Step-by-step explanation:

Computation of pension expense:

Service cost $89,400

Interest cost ($710,100 x 10%) $71,010

Expected return on plan assets(64,500)

Prior service cost amortization $10,800

Pension expense for 2020 $106,710

Therefore the pension expense for the year 2020 is $106,710