Question

Pension data for Sterling Properties include the following:
($ in 000s)
Service cost, 2018 $ 138
Projected benefit obligation, January 1, 2018 500
Plan assets (fair value), January 1, 2018 600
Prior service cost–AOCI (2018 amortization, $8) 98
Net loss–AOCI (2018 amortization, $1) 119
Interest rate, 9%
Expected return on plan assets, 13%
Actual return on plan assets, 14%
Required:
Determine pension expense for 2018. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

$94

Explanation:

Given that,

Service costs = $ 138

Interest rate = 9%

Expected return on plan assets = 13%

Actual return on plan assets = 14%

Amortization of prior service cost = $8

Amortization of net loss = $1

Pension expense for 2018:

= Service costs + Interest cost + Amortization of prior service cost + Amortization of net loss - Expected return on plan assets

= $138 + ($500 × 5%) + $8 + $1 - (13% × $600)

= $138 + $25 + $8 + $1 - $78

= $94