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A Company's Defined Benefit Pension Plan Incurs Current Service Cost

Question 6

Multiple Choice

A company's defined benefit pension plan incurs current service cost of $4,000,000. This pension plan's assets generated $2,500,000 of income, which exceeded expectations by $500,000. Pension obligations incurred interest cost of $1,500,000, which were $700,000 below expectations. During the year, the company increased benefits in the pension plan and incurred $800,000 for past service cost.


A) $5,000,000
B) $3,800,000
C) $4,600,000
D) $5,600,000

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