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Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information: 2019 2020 Service cost $300,000 $450,000 Amount funded 240,000 390,000 Discount rate 10% 10% Expected rate of return 10% 10% The actual rate of return is equal to the expected return, and the company has not made any payments to retirees. What is the pension expense for the year ended December 31, 2020? a. $480,000 b. $426,000 c. $390,000 d. $456,000

Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information: 2019 2020 Service cost $300,000 $450,000 Amount funded 240,000 390,000 Discount rate 10% 10% Expected rate of return 10% 10% The actual rate of return is equal to the expected return, and the company has not made any payments to retirees. What is the pension expense for the year ended December 31, 2020? a. $480,000 b. $426,000 c. $390,000 d. $456,000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 9MC
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Defined Benefit Pension Plan Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information: 2019 2020 Service cost $300,000 $450,000 Amount funded 240,000 390,000 Discount rate 10% 10% Expected rate of return 10% 10% The actual rate of return is equal to the expected return, and the company has not made any payments to retirees. What is the pension expense for the year ended December 31, 2020? a. $480,000 b. $426,000 c. $390,000 VOd. $456,000
Transcribed Image Text:Defined Benefit Pension Plan Spath Company adopted a noncontributory defined benefit pension plan on January 1, 2019. Spath uses the benefit/years-of-service method, which results in the following information: 2019 2020 Service cost $300,000 $450,000 Amount funded 240,000 390,000 Discount rate 10% 10% Expected rate of return 10% 10% The actual rate of return is equal to the expected return, and the company has not made any payments to retirees. What is the pension expense for the year ended December 31, 2020? a. $480,000 b. $426,000 c. $390,000 VOd. $456,000
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