The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). ($ in millions) debit (Credit) PBO Plan Assets Prior Service Cost Net (Gain) loss Pension Expense Cash Net Pension (Liability) / Asset Beginning balance (580) 82 Service cost 86 Interest cost Expected return on assets (31) Gain/loss on assets (6.00) Amortization of: Prior service cost (14) Net gain/loss Loss on PBO (33) 33 Contributions to fund (80) Retiree benefits paid 59 (59) Ending balance (667) 334 78 102 (333) What is OTC's pension expense for the year

Question

Annabella Gray

Business

18 October, 15:24

The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). ($ in millions) debit (Credit) PBO Plan Assets Prior Service Cost Net (Gain) loss Pension Expense Cash Net Pension (Liability) / Asset Beginning balance (580) 82 Service cost 86 Interest cost Expected return on assets (31) Gain/loss on assets (6.00) Amortization of: Prior service cost (14) Net gain/loss Loss on PBO (33) 33 Contributions to fund (80) Retiree benefits paid 59 (59) Ending balance (667) 334 78 102 (333) What is OTC's pension expense for the year

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Answers (1)

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Jordyn Atkinson · Answer 1

OTC's pension expense for the year is $35 million

Explanation:

Pension expense for the year = Service cost + Interest cost - Expected return on assets + Amortization of: prior service + Amortization net loss

Service cost = 86

Interest cost = (-667 + 580 + 86 + 33 - 59) = (27)

Expected return on assets = (31)

Amortization of Prior service = 14

Amortization of net loss = (102 - 82 + 6 - 33) = (7)

Pension expense = (86 - 27 - 31 + 14 - 7)

= 35 ($ in millions)