Chester Company Has a Defined Benefit Plan

Chester Company has a defined benefit plan. The fair value of plan assets on January 1, 2011, was $1,500,000. No unrecognized net loss or gain existed. On December 31, 2011, the fair value of the plan assets was $1,860,000. Benefits paid to retirees equaled $300,000. Company contributions to the plan totaled $360,000. The settlement rate was 8 percent, and the expected long-term rate of return on plan assets was 10 percent. The actual return on plan assets was

A) $150,000.
B) $180,000.
C) $224,000.
D) $300,000.

Correct Answer:

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