Presented below is pension information related to Squash Corp. for the calendar year 2020. The corporation uses IFRS. $\begin{array}{ll}
\text{ Current service cost } ................................................. & \$ 204,000 \
\text{ Discount (interest) rate } ............................................. & 9\% \
\text{ Defined benefit obligation, Jan 1 } ...............................& \$ 1,800,000 \
\text{ Benefits paid to retirees }............................................. & 100,000 \
\text{ Past service cost (effective Ian 1) }.................................. & 50,000 \

\end{array}$ The pension expense to be reported for 2020 is

Question

Presented below is pension information related to Squash Corp. for the calendar year 2020. The corporation uses IFRS. $\begin{array}{ll}
\text{  Current service cost  } .................................................  & \$ 204,000 \
\text{ Discount (interest) rate  } .............................................  & 9\% \
\text{  Defined benefit obligation, Jan 1  } ...............................& \$ 1,800,000 \
\text{    Benefits paid to retirees }............................................. & 100,000 \
\text{ Past service cost (effective Ian 1) }..................................    & 50,000 \

\end{array}$ The pension expense to be reported for 2020 is

Quizplus · Accepted Answer

The pension expense for 2020 is calculated as follows:
Service cost = $100,000
Interest cost = ($2,100,000 x 0.06) = $126,000
Expected return on plan assets = ($5,500,000 x 0.08) = ($440,000)
Amortization of past service cost = ($280,000 / 20) = $14,000
Amortization of net loss = ($800,000 / 15) = $53,333
Pension expense = $100,000 + $126,000 - $440,000 + $14,000 + $53,333 = $420,500. Therefore, the correct answer is D.

Presented Below Is Pension Information Related to Squash Corp The Pension Expense to Be Reported for 2020 Is A)

Presented Below Is Pension Information Related to Squash Corp The Pension Expense to Be Reported for 2020 Is
A)