7. Service cost with regard to pension plans: a. increases pension expense and reduces the return on plan assets. b. increases the projected benefit obligation and increases pension expense, C. increases the projected benefit obligation and reduces plan assets. d. increases pension expense and reduces plan assets. 8. Harvey Hotels has provided a defined benefit pension plan for its employees for several years. At the end of the most recent year, the following information was available with regard to the plan: service cost: $6.2 million, expected return on plan assets: $1.2 million, actual return on plan assets: $1 mimon, interest cost: $1.4 million, payments to retired employees $2 million, and amortization of prior service cost (created when the pension plan was should Harvey Hotels report as pension expense in its income statement for the year? a. $1.4 million b. $7.5 million c. $7.7 million d. $8.7 million Scallion Company received the following reports of its defined benefit pension plan for the current calendar year Balance, January 1 Service cost Interest cost Benefits paid Balance, December 31 $400,000 195,000 32,000 (80,000) $547,000 Plan assets Balance, January 1 Actual return Annual contribution Benefits paid Balance, December 31 $250,000 30,000 110,000 (80,000) $310,000 The long-term expected rate of return on plan assets is 10%. Assuming no other data are relevant, what is the pension expense for the year? a $197.000 b. $227,000 c. $172,000 d. $202,000