The following information pertains to Havana Corporation's defined benefit pension plan: ...
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Accounting
The following information pertains to Havana Corporation's defined benefit pension plan:
| ($ in 000s) | 2016 | 2017 |
|
| Beginning balances | Beginning balances |
| Projected benefit obligation | ($6,000) | ($6,504) |
| Plan assets | 5,760 | 6,336 |
| Prior service cost-AOCI | 600 | 552 |
| Net loss-AOCI | 720 | 786 |
At the end of 2016, Havana contributed $696 thousand to the pension fund and benefit payments of $624 thousand were made to retirees. The expected rate of return on plan assets was 10%, and the actuary's discount rate is 8%. There were no changes in actuarial estimates and assumptions regarding the PBO.
Assume that the amortization of Net loss-AOCI for the year 2016 is $30,000 and the service cost is $700,000.
Using information provided for Havana Corporation and the above assumptions, calculate the 2016 pension expense for Havana Corporation:
| A. $682,000 | |
| C. $634,000 | |
| D. $655,000 | |
| B. $622,000 | |
| E. None of the other answer choices are correct |
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