Abbott and Abbott has a noncontributory, defined benefit pension plan. At Decemb

Question

Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2018, Abbott and Abbott received the following information:

The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss–AOCI on January 1, 2018

Determine Abott and Abbott's pension expense 2018.

PBO (millions) Bal, Jan 1 100 service cost 21 interest paid 10 Benefits paid (10) Bal, Dec 31 121 Plan Assets Bal, Jan 1 80 Actual return on plan assets 10 Contributions 2018 21 Benefits paid (10) Balance, Dec 31 101

Explanation / Answer

Service cost 21 Interest cost 10 Expected return on plant assets (80*10%) -8 Pension Expense 23

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