Question

Towson Company has experienced tough competition for its talented workforce, leading it to enhance the pension benefits provided to employees. As a result, Towson amended its pension plan on January 1, 2017, and granted past service costs of \(250,000. Current service cost for 2017 is \)52,000. Interest expense is \(18,000, and interest revenue is \)5,000. Actual return on assets in 2017 is \(3,000. What is Towson’s pension expense for 2017? (a) \)65,000. (c) \(317,000. (b) \)302,000. (d) $315,000.

Short answer

Interest revenue is used when an organization gains a certain sum of money from the interest. It is recorded in the credit column of an organization's income statement.

Step-by-step solution

Correct answer

Option (d) $315,000 is the correct answer.

Calculations:

Particulars	Amount
Current service cost	$52,000
Add: Interest expense	$18,000
Add: Prior service cost	$250,000
Less: Interest revenue	$5,000
Pension Expense for the year 2017	$315,000