Babcock Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 600,000 Balance, January 1 $ 500,000 Service cost 360,000 Actual return 50,000 Interest cost 64,000 Annual contribution 220,000 Benefits paid (90,000) Benefits paid (90,000) Balance, December 31 $ 934,000 Balance, December 31 $ 680,000 The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year?
Babcock Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 600,000 Balance, January 1 $ 500,000 Service cost 360,000 Actual return 50,000 Interest cost 64,000 Annual contribution 220,000 Benefits paid (90,000) Benefits paid (90,000) Balance, December 31 $ 934,000 Balance, December 31 $ 680,000 The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Babcock Company received the following reports of its defined benefit pension plan for the current calendar year:
| PBO | Plan assets | ||
|---|---|---|---|
| Balance, January 1 | $ 600,000 | Balance, January 1 | $ 500,000 |
| Service cost | 360,000 | Actual return | 50,000 |
| Interest cost | 64,000 | Annual contribution | 220,000 |
| Benefits paid | (90,000) | Benefits paid | (90,000) |
| Balance, December 31 | $ 934,000 | Balance, December 31 | $ 680,000 |
The long-term expected
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