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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
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 |
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