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 total pension cost 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 total pension cost for the year?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 11RE

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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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