BB Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2020. 1/1/2012/31/20Defined benefit obligationP11,400,000P11,760,000 Pension assets (at fair value) 6,000,0006,900,000Net (gains) and losses0240,000The service cost component of pension expense for 2020 is P840,000 and the past service cost due to an increase in benefits is P180,000 effective January 1, 2020. The discount rate is 10%. What is the amount of pension expense for 2020?

Pension expenses = Service cost + Past service costs + Interest cost - Expected return…

Answered: BB Inc. received the following…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 5E

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BB Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2020.

	1/1/20	12/31/20
Defined benefit obligation	P11,400,000	P11,760,000
Pension assets (at fair value)	6,000,000	6,900,000
Net (gains) and losses	0	240,000

The service cost component of pension expense for 2020 is P840,000 and the past service cost due to an increase in benefits is P180,000 effective January 1, 2020. The discount rate is 10%. What is the amount of pension expense for 2020?

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