Presented below is pension information related to Watermelon Corp. for the calendar year 2020. The corporation uses IFRS. $\begin{array}{ll}
\text{ Current service cost }...................................................... & \$ 126,000 \
\text{Discount (interest) rate } ................................................ & 10\% \
\text{ Defined benefit obligation, Jan 1 }................................ & \$ 900,000 \
\text{ Actual \& expected return on plan assets }.......................... & 24,000 \
\text{ Actuarialloss } ................................................................. & 28,000 \

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

Question

Presented below is pension information related to Watermelon Corp. for the calendar year 2020. The corporation uses IFRS. $\begin{array}{ll}
\text{  Current service cost  }...................................................... & \$ 126,000 \
\text{Discount (interest) rate   } ................................................ & 10\% \
\text{  Defined benefit obligation, Jan 1  }................................ & \$ 900,000 \
\text{  Actual \& expected return on plan assets  }.......................... & 24,000 \
\text{  Actuarialloss }  .................................................................    & 28,000 \

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

Quizplus · Accepted Answer

The pension expense for the year is calculated as follows:
Service cost = $200,000 
Interest cost = ($1,000,000 x 6%) = $60,000 
Expected return on plan assets = ($1,200,000 x 5%) = ($60,000) 
Amortization of past service cost = ($80,000/10) = $8,000 
Amortization of loss = ($300,000/10) = $30,000

Therefore, pension expense = Service cost + Interest cost - Expected return on plan assets + Amortization of past service cost + Amortization of loss
= $200,000 + $60,000 - $60,000 + $8,000 + $30,000
= $192,000.

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

Presented Below Is Pension Information Related to Watermelon Corp The Pension Expense to Be Reported for 2020 Is
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