TKE Corporation established a defined benefit pension plan in 2016. TKE has provided the following information for the year ended December 31, 20X1: Service cost $ 90,000 Interest cost $ 120,000 Actual return on plan assets $ 70,000 Expected return on plan assets $ 80,000 Amortization of prior service costs $ 30,000
TKE Corporation established a defined benefit pension plan in 2016. TKE has provided the following information for the year ended December 31, 20X1: Service cost $ 90,000 Interest cost $ 120,000 Actual return on plan assets $ 70,000 Expected return on plan assets $ 80,000 Amortization of prior service costs $ 30,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
TKE Corporation established a defined benefit pension plan in 2016. TKE has provided the following information for the year ended December 31, 20X1:
| Service cost | $ | 90,000 | |
| Interest cost | $ | 120,000 | |
| Actual return on plan assets | $ | 70,000 | |
| Expected return on plan assets | $ | 80,000 | |
| Amortization of prior service costs | $ | 30,000 | |
If the company contributes $130,000 cash to the pension plan trustee, which one of the following
Multiple Choice
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DR Pension expense 90,000 DR Pension asset (liability) 40,000 CR Cash 130,000
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DR Pension expense 120,000 DR Pension asset 10,000 CR Cash 130,000
-
DR Pension expense 130,000 CR Cash 130,000
-
DR Pension expense 160,000 CR Cash 130,000 CR Pension asset (liability) 30,000
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