Fox Company received the following reports of its defined benefit pension plan for the current calendar year:

PBO		Plan assets
Balance, January 1	$640,000	Balance, January 1	$540,000
Service cost	360,000	Actual return	53,000
Interest cost	68,000	Annual contribution	224,000
Benefits paid	(95,000)	Benefits paid	(95,000)
Balance, December 31	$973,000	Balance, December 31	$722,000

The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year?

$360,000.

$428,000.

$384,800.

$375,000.