XYZ Sponsors a Defined Contribution Plan for Its Employees

question 4

Multiple Choice

XYZ sponsors a defined contribution plan for its employees.On January 1,Year 1,the company paid $120,000 to the plan's trustee.The trustee called for annual payments of $90,000 to be made annually into the plan.Which of the following best describes the effects of this plan on XYZ's Year 1 financial statements?

• A) XYZ would record pension expense of $120,000 and a current asset of $30,000.
• B) XYZ would record pension expense of $90,000 and a current asset of $30,000.
• C) XYZ would record pension expense of $90,000 and a non-current asset of $30,000.
• D) XYZ would record pension expense of $120,000 and no balance sheet amounts.

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A collection of laws that are not codified but are founded on judicial decisions made by courts.

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