The follo Decembe
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:The following information relates to the defined benefit pension plan for the Nicola Company for the year ending
December 31, 2020.
Defined benefit obligation, January 1
P4,600,000
Defined benefit obligation, Dec. 31
4,729,000
Fair value of plan assets, January 1
5,035,000
Fair value of plan assets, Dec. 31
5,565,000
Expected return on plan assets
450,000
Employer contributions
425,000
Benefits paid to retirees
390,000
Settlement rate
10%
Service cost for the year would be
P390,000
O P59,000
O P94,000
O P129.000
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