Question

Here is information for 2018 related to the pension plan for Cherry's Department Stores.

Amortization of net gain $ 30,000

Amortization of prior service cost 10,000

Employer’s funding contribution for 2020 90,000

Fair value of plan assets (at beginning of 2020) 360,000

Interest cost on the PBO 48,000

Projected benefit obligation (at beginning of 2020) 480,000

Retirement benefits paid by the pension plan in 2020 65,000

Return on plan assets (both the actual return and the expected return) 32,500

Service cost 52,000

Instructions Compute Cherry’s Pension Expense for 2018.

Answer 1

	Amount $
Interest cost on the PBO	48,000
Add : Service cost	52,000
Less: Expected Return on plan assets	-32,500
Less :Amortization of net gain	-30,000
Add :Amortization of prior service cost	10,000
Cherry’s Pension Expense for 2018	47,500