Question
Newton Inc offers its employees a defined benefit pension plan. Newton Inc epots unde US GAAP. It records actual gains and losses in Other Compehensive
Newton Inc offers its employees a defined benefit pension plan. Newton Inc epots unde US GAAP. It records actual gains and losses in Other Compehensive Income (OCI) and amotizes these amounts over the average remaining service life of its employees when they exceed a threshold. Newton Inc did not record any past service cost in fiscal year 2021.
Below you can find excepts from Newtons pension footnotes:
| 2020 | 2021 |
Sevice cost | 3,300 | 3,500 |
Interest cost | 1,600 | 1,750 |
Expected return on plan assets | 2,100 | 1,900 |
Actual return on plan assets | 1,900 | 2,000 |
Contibutions to defined benefits plan | 2,000 | 2,100 |
Benefits paid | 1,250 | 1,350 |
Pension liability | 35,000 | 42,500 |
Accumulated OCI losses related to defined benefit plans | 4,500 | 5,100 |
What is your best appoximation of the net pension expenses recorded in P&L elated to defined benefit plans in the fiscal year 2021?
a. 6,950
b. 6,600
c. 6,250
d. 8,150
e. None of the above
Please explain why the answer is C in detail. Thank you.
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