A company has a defined benefit pension liability of $4,700,000 at the beginning of the year. The company contributes $7,000,000 to the pension during the year and records a pension expense of $10,200,000. The closing balance of the defined benefit pension plan at year-end is therefore a:

Question

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The closing balance is calculated as the opening balance plus pension expense minus contributions. Therefore, $4,700,000 + $10,200,000 - $7,000,000 = $7,900,000 liability.

A Company Has a Defined Benefit Pension Liability of $4,700,000