VS Co. has experienced tough competition, leading it to seek concessions from its employees in the company's pension plan. In exchange for promises to avoid layoffs and wage cuts, the employees agreed to receive lower pension benefits in the future. As a result, VS Co. amended its pension plan on January 1, 2019, and recorded negative past service cost of €125,000. The average period to vesting for the benefits affected by this plan is 5 years. Current service cost for 2019 is €26,000. Interest expense is €9,000, and interest revenue is €2,500. Actual return on assets in 2019 is €1,500. Compute pension expense for VS Co. in 2019. О а. (€99,000) O b. €92,500 О с. €99,000 O d. (€92,500)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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VS Co. has experienced tough competition, leading it to seek concessions from its employees in the
company's pension plan. In exchange for promises to avoid layoffs and wage cuts, the employees
agreed to receive lower pension benefits in the future. As a result, VS Co. amended its pension plan on
January 1, 2019, and recorded negative past service cost of €125,000. The average period to vesting for
the benefits affected by this plan is 5 years. Current service cost for 2019 is €26,000. Interest expense is
€9,000, and interest revenue is €2,500. Actual return on assets in 2019 is €1,500. Compute pension
expense for VS Co. in 2019.
а. (€99,000)
Ob. €92,500
C. €99,00O
O d. (€92,500)
Transcribed Image Text:VS Co. has experienced tough competition, leading it to seek concessions from its employees in the company's pension plan. In exchange for promises to avoid layoffs and wage cuts, the employees agreed to receive lower pension benefits in the future. As a result, VS Co. amended its pension plan on January 1, 2019, and recorded negative past service cost of €125,000. The average period to vesting for the benefits affected by this plan is 5 years. Current service cost for 2019 is €26,000. Interest expense is €9,000, and interest revenue is €2,500. Actual return on assets in 2019 is €1,500. Compute pension expense for VS Co. in 2019. а. (€99,000) Ob. €92,500 C. €99,00O O d. (€92,500)
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