A Company's Defined Benefit Pension Plan Incurs Current Service Cost

question 85

Essay

A company's defined benefit pension plan incurs current service cost of $3,000,000.Expected income on the pension plan's assets amounted to $9,800,000,while actual income was $9,900,000.The interest on the pension obligation was $10,000,000,which matched the actuarial estimates.The pension plan has no past service costs,and unamortized actuarial gains or losses at the beginning of the year are within the corridor limit.
Requirement:
Compute the amount of pension expense for the year.

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Definitions:

Money Supply

The total amount of money available in an economy, including cash, deposits, and other forms of liquidity.

Real Output

The production of goods and services valued at constant prices, thus removing the effect of inflation.

Price Level

The calculated mean price level for the entire range of economic goods and services.

Nominal GDP

The gross domestic product measured in current prices, without adjusting for inflation.