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Information on Entity A’s defined benefit plan is as follows: PV of DBO – Jan. 1, 20x1  2,000,000 FVPA – Jan.1, 20x1  1,800,000 PV of DBO – Dec. 31, 20x1  2,900,000 FVPA, end. – Dec. 31, 20x1  2,600,000 Current service cost     400,000 Actuarial loss     200,000 Return on plan assets     120,000 Discount rate 10% How much is the component of the20x1 defined benefit cost to be recognized in profit or loss? 420,000 560,000 680,000 400,000

Information on Entity A’s defined benefit plan is as follows: PV of DBO – Jan. 1, 20x1  2,000,000 FVPA – Jan.1, 20x1  1,800,000 PV of DBO – Dec. 31, 20x1  2,900,000 FVPA, end. – Dec. 31, 20x1  2,600,000 Current service cost     400,000 Actuarial loss     200,000 Return on plan assets     120,000 Discount rate 10% How much is the component of the20x1 defined benefit cost to be recognized in profit or loss? 420,000 560,000 680,000 400,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Information on Entity A’s defined benefit plan is as follows:

PV of DBO – Jan. 1, 20x1

 2,000,000

FVPA – Jan.1, 20x1

 1,800,000

PV of DBO – Dec. 31, 20x1

 2,900,000

FVPA, end. – Dec. 31, 20x1

 2,600,000

Current service cost

    400,000

Actuarial loss

    200,000

Return on plan assets

    120,000

Discount rate

10%

How much is the component of the20x1 defined benefit cost to be recognized in profit or loss?

  1. 420,000

  2. 560,000

  3. 680,000

  4. 400,000

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