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 pension liability should Gillock report in its balance sheet for the year ended December 31, 2019?
A) $361,440
B) $393,440
C) $421,440
D) $481,440
Correct Answer:
Verified
Correct Answer:
Verified
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