Compute the amount of pension expense for the year

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Reference no: EM133433794

Problem

Current service cost for a defined benefit pension plan amounted to $6,000,000.
This pension plan's assets generated $5,500,000 of income, which exceeded expectations by $1,000,000.
Pension obligations incurred interest cost of $4,500,000, which were above expectations by $200,000.
During the year, the company increased benefits in the pension plan and incurred $400,000 for past service cost.

Required:

1. Compute the amount of pension expense for the year

2. Prepare the journal entry (in summary) assuming the company contributed $6,000,000 in cash at the end of the year.

Reference no: EM133433794

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