The Marino Company has provided you the following information pertaining to its defined benefit pension plan that was adopted on January 1, 2014:

• The service cost was $950,000 during 2014 and $1,045,000 during 2015.
• The prior service cost amortization each year was $290,000.
• The contribution to the pension plan was $1,500,000 on December 31, 2014 and $1,800,000 on December 31, 2015.
• The actuarially determined discount rate and the expected return on plan assets was 10%.
• The actual return on plan assets was 9.5%.
• Retirement benefits pertaining to years of service prior to 2014 were granted to the employees. The prior service cost is being amortized over the remaining ten-year life of the employees.

-What is the pension expense for the year ended December 31,2014?

Question

The Marino Company has provided you the following information pertaining to its defined benefit pension plan that was adopted on January 1, 2014:

• The service cost was $950,000 during 2014 and $1,045,000 during 2015.
• The prior service cost amortization each year was $290,000.
• The contribution to the pension plan was $1,500,000 on December 31, 2014 and $1,800,000 on December 31, 2015.
• The actuarially determined discount rate and the expected return on plan assets was 10%.
• The actual return on plan assets was 9.5%.
• Retirement benefits pertaining to years of service prior to 2014 were granted to the employees. The prior service cost is being amortized over the remaining ten-year life of the employees.

-What is the pension expense for the year ended December 31,2014?

Quizplus · Accepted Answer

Pension expense ($1,530,000)= service cost ($950,000)+ interest cost($290,000*)+ prior service cost amortization ($290,000)*$290,000 = beginning PBO ($2,900,000 = $290,000 × 10 years)× 10%

The Marino Company Has Provided You the Following Information Pertaining