FITNESS-FOR-ALL FY2026 ANALYSIS Appendix IV - Defined Benefit Plan On July 1, 2026, FFA implemented a defined benefit plan to entice its employees to stay for years to come. To really encourage employees to stay, FFA ensured that the plan would be non- contributory for all employees. In other words, only FFA would need to contribute, while the employees would benefit from the amounts when they retire. Stephanie deemed $230,000 to be suitable for past service costs. No contributions have been made from FFA for current service costs, and $120,000 has been contributed from FFA for past service costs. The actuary has sent you further information concerning the pension plan. Detail Amount Current Service Cost $45,000 Contributions for Past Services $120,000 Expected Return on Plan Assets $15,000 Interest Expense on Accrued Benefit Obligation $10,000 Actual Value of Plan Assets (12/31/2026) $160,000 Actual Value of Accrued Benefit Obligation $310,000 (12/31/2026) Given Justin had previously worked at small private companies, he was unsure how to account for the pension expense. As such, the only entry was a debit of $120,000 to pension expense and a credit of $120,000 to cash, as this was the amount contributed thus far.