The pension plan was amended last year, creating a prior service cost of $20 million

The pension plan was amended last year, creating a prior service cost of $20 million. Service

cost and interest cost for the year were $10 million and $4 million, respectively. At the end of

the year, there was a negligible balance in the net gain–pensions account. The actual return

on plan assets was $4 million although it was expected to be $6 million. On average,

employees’ remaining service life with the company is 10 years. What was the pension

expense for the year?

a) $ 8 million

b) $10 million

c) $12 million

d) $18 million