The pension plan was amended last year, creating a prior service cost of $20 million. Service cost and interest cost for the year were $10 million and $4 million, respectively. At the end of the year, there was a negligible balance in the net gain–pensions account. The actual return on plan assets was $4 million although it was expected to be $6 million. On average, employees’ remaining service life with the company is 10 years. What was the pension expense for the year?
The pension plan was amended last year, creating a prior service cost of $20 million. Service cost and interest cost for the year were $10 million and $4 million, respectively. At the end of the year, there was a negligible balance in the net gain–pensions account. The actual return on plan assets was $4 million although it was expected to be $6 million. On average, employees’ remaining service life with the company is 10 years. What was the pension expense for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The pension plan was amended last year, creating a prior service cost of $20 million. Service cost and interest
cost for the year were $10 million and $4 million, respectively. At the end of the year, there was a negligible balance
in the net gain–pensions account. The actual return on plan assets was $4 million although it was expected
to be $6 million. On average, employees’ remaining service life with the company is 10 years. What was the
pension expense for the year?
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