On January 2, Luft Co. established a noncontributory defined-benefit pension plan covering all employees and contributed $400,000 to the plan. At December 31, Luft determined that the annual service and interest costs of the plan were $720,000. The expected and the actual rate of return on plan assets for the year was 10%. Luft's pension expense has no other components. What amount should Luft report in its December 31 balance sheet as a liability for pension benefits?

		$280,000
		$320,000
		$360,000
		$720,000
		I do not know