Harvey Hotels has provided a defined benefit pension plan for its employees for several years. At the end of the most recent year, the following information was available with regard to the plan: service cost: $6.3 million, expected return on plan assets: $1.3 million, actual return on plan assets: $1.1 million, interest cost: $1.5 million, payments to retired employees: $2.1 million, and amortization of prior service cost (created when the pension plan was amended causing a drop in the projected benefit obligation): $1.2 million. What amount should Harvey Hotels report as pension expense in its income statement for the year

Question

contestada

Respuesta :

Tutorconsortium311 Tutorconsortium311 · Answer 1 · 2022-07-18T14:34:37+02:00

Pension expense of Harvey Hotels in its income statement for the year= $7.7 million .

Service cost= $6.3 million.

Interest cost= $1.5 million.

Amortization of prior service cost= $1.2 million.

Expected return on plan assets= $1.3 million.

Pension expense=?

Pension expense is decreased by amortization of net gain.

Pension expense= (Service cost+ Interest cost- Expected return on plan assets+ Amortization of prior service cost

= (6.3 +1.5 +1.2)-1.3 .

= 7.7 million.

Pension expense of Harvey Hotels in its income statement for the year= $7.7 million.

An income statement shows a company's revenues, expenses and profitability over a period of time.
It is also sometimes called a profit-and-loss (P&L) statement or an earnings statement.
It shows your: revenue from selling products or services.
Expenses to generate the revenue and manage your business.

An income statement's objective is to display a company's financial success over a specific time frame.
It narrates the financial history of a company's operations.
You may discover all of the revenue and expense accounts for a specific time period in an income statement.

Learn more about income statement here:

https://brainly.com/question/24778422

#SPJ4