Which statement about "defined contribution plans" is correct?

• A) Pension cost cannot be capitalized to the cost of inventory.
• B) Pension cost may not, be capitalized to the construction cost of property, plant and equipment.
• C) Pension expense equals the contributions made based on the plan formula.
• D) Pension expense equals the present value of the future benefits to be paid to the retiree

• 2. A company's defined benefit pension plan incurs current service cost of $4,000,000. his pension plan's assets generated $2,500,000 of income, which exceeded expectations by $500,000. Pension obligations incurred interest cost of $1,500,000, Jhich were $700,000 below expectations. During the year, the company increased senefits in the pension plan and incurred $800,000 for past service cost. What is the pension expense for the year?

  • A) $3,800,000
  • B) $4,600,000
  • C) $5,600,000
  • D) $5,000,000

  • 3. What are actuarial losses or gains in a defined benefit plan?

    A) Difference arising between the actual and the expected value of plan

    contributions.

    • B) Expected income earned on the pension plan assets.
    • c) Differences arising between the actual and expected values of the obligation.
    • D) Plan amendments that retrospectively improve pension plan benefits.