Veldre Company provides the following information about its defined benefit pension plan for the year 2012. Service

Question:

Veldre Company provides the following information about its defined benefit pension plan for the year 2012.

Service cost ………………………………………………… $ 90,000

Contribution to the plan …………………………………….. 105,000

Prior service cost amortization ………………………………. 10,000

Actual and expected return on plan assets …………………… 64,000

Benefits paid …………………………………………………. 40,000

Plan assets at January 1, 2012 ………………………………. 640,000

Projected benefit obligation at January 1, 2012 …………….. 700,000

Accumulated OCI (PSC) at January 1, 2012 ……………….. 150,000

Interest/discount (settlement) rate ……………………………… 10%

Instructions

Compute the pension expense for the year 2012.

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...