Question
Netflix Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December
Netflix Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2021.
1/1/2021 | 12/31/2021 | |
Fair value of plan assets | $5,600,000 | $6,000,000 |
PBO | 6,400,000 | 6,880,000 |
AOCI | 0 | (120,000) |
The service cost component of pension expense for 2021 is $500,000 and the amortization of prior service cost due to an increase in benefits is $80,000. The settlement rate is 10% and the expected rate of return is 9%. The actual return from plan assets in 2021 is $540,000. What is the amount of pension expense for 2021?
a) $680,000
b) $696,000
c) $716,000
d) $828,000
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