The following facts apply to the pension plan of Yorke Inc. for the year 2021: Plan assets, Jan. 1, 2021 $490,000

Defined benefit obligation, Jan. 1, 2021 389,000

Interest and expected earnings rate 8.5%

Annual pension service cost 40,000

Contributions (funding) 30,000

Benefits paid to retirees 33,400

Instructions Calculate pension expense for the year 2021, and provide the entries to recognize the pension expense and funding for the year assuming that the company follows ASPE.

Question 2

a) identify what transactions and events change its amount.

b) Explain what a defined benefit plan is.