On January 1, 2018, Gillock Climbing Academy Instituted a Defined

question 109

Multiple Choice

On January 1, 2018, Gillock Climbing Academy instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2018 and 2019 was $600,000. The interest rate used to determine the projected benefit obligation is 10%. Both the actual and the expected return on plan assets are 8% for both years. Gillock funded the plan in the amount of $400,000 each January 1, beginning on January 1, 2018.
- What amount of pension expense should Gillock report in its income statement for the year ended December 31, 2019?

• A) $593,440.
• B) $600,000.
• C) $628,000.
• D) $726,560.