Current Service Cost for a Defined Benefit Pension Plan Amounted

question 53

Multiple Choice

Current service cost for a defined benefit pension plan amounted to $1,000,000. Expected income on the pension plan's assets amounted to $7,500,000, while actual income was $7,800,000. The interest on the pension obligation was $9,000,000, which matched the actuarial estimates. No past service costs arose during the year. Given this information the pension expense for the year was:

• A)$500,000
• B)$2,200,000
• C)$2,500,000
• D)$1,000,000

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Definitions:

Liability

An obligation or debt owed by an individual or company, typically financial, that arises from past transactions or actions.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts, which allows for the assets of the debtor to be measured and evaluated, and the liabilities to be discharged or restructured under the protection of bankruptcy court.

Loan Agreement

A contract between a borrower and a lender outlining the terms and conditions of a loan.

Bankruptcy Defense

Strategies or legal arguments used by a defendant in litigation to counter claims made in the context of a bankruptcy case.