The following information is related to the defined benefit pension plan of Drea
ID: 2381799 • Letter: T
Question
The following information is related to the defined benefit pension plan of Dreamworld Company for the year:
Service cost
$68,000
Contributions to pension plan
111,000
Benefits paid to retirees
160,000
Plan assets (fair value), January 1
641,000
Plan assets (fair value), December 31
759,000
Actual return on plan assets
158,000
PBO, January 1
940,000
PBO, December 31
942,000
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?
$99,310.
$68,000.
$162,000.
$104,310.
The following information is related to the defined benefit pension plan of Dreamworld Company for the year:
Explanation / Answer
Service cost
$68,000
interest cost
940,000*10/100=94000
expected return on Plan assets
641,000*9/100=57690
pension expense=94000+68000-57690=$104310
Service cost
$68,000
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