What is the 2019 Pension Expense for Fox Co. based on the following information?

ID: 2529798 • Letter: W

Question

What is the 2019 Pension Expense for Fox Co. based on the following information? Pension data for the 2019 calendar year:Service cost$ 70,000 Actual return on plan assets 9% Benefits to retirees 60,000 Expected return on plan assets 7% Cash contributions 50,000 Settlement rate 6% Fox's Beginning 2019 Info (December 31, 2018 balances):Plan Assets$ 700,000 Projected Benefit Obligation (PBO) 850,000 Accumulated net other comprehensive loss (average service life is 10 years) 175,000 Prior Service Cost (PSC-Fox uses years of service amortization method) 300,000 (This PSC is attributable to 80 employees who are expected to retire as follows: 10 retire in 2 years, 15 in 3 years, 20 in 4 years, and 35 in 5 years) $156,000 $142,000 $138,000 $165,000 What is the 2019 Pension Expense for Fox Co. based on the following information? Pension data for the 2019 calendar year:Service cost$ 70,000 Actual return on plan assets 9% Benefits to retirees 60,000 Expected return on plan assets 7% Cash contributions 50,000 Settlement rate 6% Fox's Beginning 2019 Info (December 31, 2018 balances):Plan Assets$ 700,000 Projected Benefit Obligation (PBO) 850,000 Accumulated net other comprehensive loss (average service life is 10 years) 175,000 Prior Service Cost (PSC-Fox uses years of service amortization method) 300,000 (This PSC is attributable to 80 employees who are expected to retire as follows: 10 retire in 2 years, 15 in 3 years, 20 in 4 years, and 35 in 5 years) $156,000 $142,000 $138,000 $165,000 What is the 2019 Pension Expense for Fox Co. based on the following information? Pension data for the 2019 calendar year:Service cost$ 70,000 Actual return on plan assets 9% Benefits to retirees 60,000 Expected return on plan assets 7% Cash contributions 50,000 Settlement rate 6% Fox's Beginning 2019 Info (December 31, 2018 balances):Plan Assets$ 700,000 Projected Benefit Obligation (PBO) 850,000 Accumulated net other comprehensive loss (average service life is 10 years) 175,000 Prior Service Cost (PSC-Fox uses years of service amortization method) 300,000 (This PSC is attributable to 80 employees who are expected to retire as follows: 10 retire in 2 years, 15 in 3 years, 20 in 4 years, and 35 in 5 years) $156,000 $142,000 $138,000 $165,000

Explanation / Answer

Service Cost

$70000

Add: Interest Cost (850000 x 6%)

51000

Less: Expected return on plan assets ($700000 × 7%)

49000

Pension expense

$72000