As the accountant for Sunlight City, you determine the following with respect to the city's pensions in a particular year.
Service cost..................................................................... $356,000
Interest on total pension liability.............................................. 400,000
Actual earnings on pension plan investments............................... 500,000
Projected earnings on pension plan investments........................... 450,000
Employer contribution to the plan.............................................180,000
Benefits paid to retirees.........................................................211,000
1. Based on the information provided, what should the city report as its pension expense for the year?
2. Suppose that the benefits paid to retirees was actually $251,000 rather than $211,000. How would that affect the pension expense? Explain.
3. Suppose also that the city failed to contribute anything to the pension plan.
a. How would that affect the pension expense to be reported on the government-wide statements? Explain.
b. How would it affect the pension expenditure to be reported on the statements of the general fund?