Harvey Hotels has provided a defined benefit pension plan for its employees for several years. At the
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Question:
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: $63 million, expected return on plan assets: $13 million, actual return on plan assets: $11 million, interest cost: $15 million, payments to retired employees: $21 million, and amortization of prior service cost (created when the pension plan was amended causing a drop in the projected benefit obligation): $2.2 million. What amount should Harvey Hotels report as pension expense in its income statement for the year?
- $12.0 million
- $9.9 million
- $2.5 million
- $9.7 million
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