Use the following information for questions 56-57.
Presented below is information related to Kiwi Ltd. for calendar 2020. The corporation uses IFRS. $
\begin{array}{ll}
\text{ Defined benefit obligation, Jan 1 }.................................. & \$ 720,000 \
\text{Fair value of plan assets, Jan 1 ...................................... } & 700,000 \
\text{ Current service cost} ....................................................... & 90,000 \
\text{Contributions to plan }..................................................... & 125,000 \
\text{Actual and expected return on plan assets }...................... & 56,000 \
\text{ Past service costs (effective Jan 1) } .................................. & 10,000 \
\text{ Benefits paid to retirees}................................................... & 96,000 \
\text{ Interest (discount) rate }................................................... & 9\% \

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

Question

Use the following information for questions 56-57.
Presented below is information related to Kiwi Ltd. for calendar 2020. The corporation uses IFRS. $
\begin{array}{ll}
\text{ Defined benefit obligation, Jan 1 }..................................  & \$ 720,000 \
\text{Fair value of plan assets, Jan 1  ...................................... } & 700,000 \
\text{  Current service cost} ....................................................... & 90,000 \
\text{Contributions to plan   }..................................................... & 125,000 \
\text{Actual and expected return on plan assets  }......................  & 56,000 \
\text{ Past service costs (effective Jan 1) } .................................. & 10,000 \
\text{  Benefits paid to retirees}...................................................  & 96,000 \
\text{  Interest (discount) rate }................................................... & 9\% \
  
\ 
\end{array}
$
-The pension expense to be reported for 2020 is

Quizplus · Accepted Answer

From the given information, the pension expense for 2020 can be calculated as follows:
Service cost = $100,000
Interest cost = ($500,000 x 0.06) = $30,000
Expected return on plan assets = ($525,000 x 0.05) = $26,250
Amortization of past service cost = $5,000
Total pension expense = $100,000 + $30,000 - $26,250 + $5,000 = $109,750
Therefore, the closest option to the total pension expense is option B ($109,700).

Use the Following Information for Questions 56-57 -The Pension Expense to Be Reported for 2020 Is A)

Use the Following Information for Questions 56-57 -The Pension Expense to Be Reported for 2020 Is
A)