Question
On January 1, 2018, Tiffany Academy instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2018 and
On January 1, 2018, Tiffany Academy instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2018 and 2019 was $600,000. The interest rate used to determine the projected benefit obligation is 10%. Both the actual and the expected return on plan assets are 8% for both years. Tiffany funded the plan in the amount of $400,000 each January 1, beginning on January 1, 2018. What net pension liability should Tiffany report in its balance sheet for the year ended December 31, 2019?
A. $361,440
B. $393,440
C. $421,440
D. $487,440
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