Kraft, Inc. sponsors a defined-benefit pension plan. The following data relates

Question

Kraft, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2015. Service cost $ 230,000 Contributions to the plan 220,000 Actual return on plan assets 180,000 Projected benefit obligation (beginning of year) 2,400,000 Fair value of plan assets (beginning of year) 1,600,000 The expected return on plan assets and the settlement rate were both 10%. The amount of pension expense reported for 2015 is ? a. $230,000. b. $290,000. c. $310,000. d. $470,000. ?

Explanation / Answer

c. $310,000.

The amount of pension expense reported for 2015 is:

= $230,000 + ($2,400,000 × .10) - ($1,600,000 × .10)

= $310,000

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