Reference no: EM132580180

Smith, Inc. has a pension plan with the following data available for 20X1 and 20X2:

                                        20X1                      20X2

Service cost                   $30,000           $34,000

Interest cost                    $18,000         $20,000

Actual return on plan assets   $15,000      $21,600

Beginning of year plan assets      $200,000  $240,000

Discount rate                               8%          8%

Expected return on plan assets      8%           8%

Question 1: Smith's pension expense for 20X1 is:

Multiple Choice

Option 1: $32,000.

Option 2: $30,000.

Option 3: $33,000.

Option 4: $48,000.