Carla Vista, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined-benefit pension plan for the year ended December 31, 2026:January 1, 2026December 31, 2026Fair value of pension plan assets$5350000$5750000Projected benefit obligation61500006630000Accumulated benefit obligation10950001335000Accumulated OCI - (Gains/Losses)0(145000)Actual return on plan assets290000The service cost component of pension expense for 2026 is $475000 and the amortization of prior service cost due to an increase inbenefits is $75000. The settlement rate is 10%. Assuming that the actual return equals the expected return on plan assets, what is theamount of pension expense for 2026?O $875000O $950000$1165000$550000

Given:Service cost=$475,000Actual Return on Plan Assets = $290,000amortization of prior service cost…

Answered: Carla Vista, Inc. received the…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 7E

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