QUESTION 1 Austin Yard Corp. sponsors a defined benefit pension plan for its CEO, Sumeet. The plan's benefit formula is below. This formula determines the annual payment due to Sumeet during retirement (paid at the end of each retirement year, as long as Sumeet is alive). Benefit formula: 2% x years of service highest salary prior to retirement Additional facts about the plan (as of December 31, 2020): Sumeet's years of service provided so far, as of December 31, 2020: 8 years Sumeet's expected retirement date: December 31, 2030. Sumeet's life expectancy after retirement: 23 years Sumeet's salary for 2020: $600,000 Sumeet's expected highest salary prior to retirement: $900,000 Settlement rate: 4% Expected rate of return on plan assets: 7% Determine the service cost component of Austin Yard's annual pension expense for 2020 (round your final answer to the nearest $1,000). O $103,000 O $120,000 $181,000 O $1,445,000 None of the above QUESTION 2 The following information relates to the defined benefit pension plan of Operators Co. for the current year. Service cost for the year $ 345,000 Contributions to the plan during the year 300,000 Actual return on plan assets for the year 76,000 Projected benefit obligation (beginning of year) 3,200,000 Fair value of plan assets (beginning of year) 2,800,000 Settlement rate Expected rate of return on plan assets 6% 5% How much pension expense should Operators recognize for the current year? O $37,000 O $337,000 $397,000 $429,000 O $505,000