Question

27 The following information is related to the defined benefit pension plan of Dreamworld Company for the year: Service cost $ 60,000 Contributions to pension plan 110,000 Benefits paid to retirees 150,000 Plan assets (fair value), January 1 640,000 Plan assets (fair value), December 31 750,000 Actual return on plan assets 150,000 PBO, January 1 900,000 PBO, December 31 960,000 Discount rate 10 % Long-term expected return on plan assets 9 % Assuming no other relevant data exist, what is the pension expense for the year

Answer 1

$92,400

Step-by-step explanation:

Calculation for the pension expense for the year

PENSION EXPENSE

Service cost $60,000

Interest cost $90,000

(10%*900,000)

Less Expected return on plan assets ($57,600)

(9%*640,000)

Pension expense $92,400

Therefore the is the pension expense for the year will be $92,400