USA Accounting for pensions and postretirement benefits


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  • The Lotus Company offers employees a defined contribution pension plan. In 2020, Lotus contributed $780,000 as required according to the plan. The pension plan paid $685,000 to retired employees in 2020. Which of the following statements is true?
  • Lotus will record and report pension expense of $685,000.
  • Lotus will record an accrued liability of $95,000.
  • Lotus will record and report pension expense of $780,000.
  • Lotus will recognize prior service cost of $95,000
Please help
 
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