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Exercise 17-6 (Algo) Changes in the pension obligation; determine service cost [LO17-3, 17-6] Pension data for David Emerson Enterprises include the following: ($ in millions)
Exercise 17-6 (Algo) Changes in the pension obligation; determine service cost [LO17-3, 17-6]
Pension data for David Emerson Enterprises include the following:
| ($ in millions) | |||
| Discount rate, 12% | |||
| Projected benefit obligation, January 1 | $ | 300 | |
| Projected benefit obligation, December 31 | 470 | ||
| Accumulated benefit obligation, January 1 | 305 | ||
| Accumulated benefit obligation, December 31 | 420 | ||
| Cash contributions to pension fund, December 31 | 155 | ||
| Benefit payments to retirees, December 31 | 55 | ||
Required: Assuming no change in actuarial assumptions and estimates, determine the service cost component of pension expense for the year ended December 31.
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