Presented below is pension information related to Power Corp. for the year 2012: $\begin{array}{llcc}
\text {Service cost } &\$24,000 \
\text { Interest on projected benefit obligation } &18,000\
\text { Amortization of prior se1vice cost che to increase in benefits } &4,000\
\text { Expected return on plan assets } &6,000\

\end{array}$
The amount of pension expense to be reported for 2012 is
A) $36,000
B) $48,000
C) $54,000
D) $40,000

Question

Presented below is pension information related to Power Corp. for the year 2012: $\begin{array}{llcc}
  \text {Service cost  } &\$24,000  \
 \text { Interest on projected benefit obligation } &18,000\
 \text { Amortization of prior se1vice cost che to increase in benefits } &4,000\
 \text { Expected return on plan assets } &6,000\

\end{array}$
 The amount of pension expense to be reported for 2012 is
A) $36,000
B) $48,000
C) $54,000
D) $40,000

Quizplus · Accepted Answer

Pension expense is calculated as the sum of service cost, interest on the projected benefit obligation, and amortization of prior service cost, minus the expected return on plan assets. Thus, the calculation is $24,000 + $18,000 + $4,000 - $6,000 = $40,000.

Presented Below Is Pension Information Related to Power Corp The Amount of Pension Expense to Be Reported for 2012