Please show calculations Colombo Enterprises has a defined benefit pension plan.

Question

Please show calculations

Colombo Enterprises has a defined benefit pension plan. At the end of the reporting year, the following data
were available: beginning PBO, $75,000; service cost, $14,000; interest cost, $6,000; benefits paid for the year,
$9,000; ending PBO, $89,000; and the expected return on plan assets, $10,000. There were no other pension
related costs. The journal entry to record the annual pension costs will include a debit to pension expense for:
A. $20,000.
B. $15,000.
C. $12,000.
D. $10,000.

Explanation / Answer

Option D. $10,000 is the correct answer. Journal Entry for pension expenses: Pension Expense         $10,000       Cash                                             $10,000 (To record pension expenses) Pension expenses for the year ended is comprised of the following components of pension cost. Service Cost                                  $14,000 Interest cost                                       6,000 Expected return on plan assets          (10,000)                                                      __________ Pension expenses                            $10,000                                                      __________

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