Question
On January 1, 2024, Onyeocha Climbing Academy instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2024
On January 1, 2024, Onyeocha Climbing Academy instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2024 and 2025 was $760,000. The interest rate used to determine the projected benefit obligation is 12%. Both the actual and the expected return on plan assets are 8% for both years. Onyeocha funded the plan in the amount of $650,000 each January 1, beginning on January 1, 2024.
What pension liability should Onyeocha report in its balance sheet for the year ended December 31, 2025?
Multiple Choice
$203,040
$151,040
$333,440
$333,440
$242,240
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