Reference no: EM132809054

Flash Inc. has a defined benefit plan for its employees. The following information relates to this plan:

Present value of defined benefit obligation, January 1, 2002        10,000,000

Fair value of plan assets, January 1, 2002                                  10,400,000

Service cost - 2002                                                                   800,000

Actual return on plan assets - 2002                                               900,000

Discount rate based on high quality corporate bonds                            10%

Expected rate of return on assets                                                        8%

Problem 1: An actuarial loss of ?20,000 was incurred during 2002. There was no unrecognized prior service cost or unrecognized gains or losses. Flash's defined benefit cost for the year was

a. 880,000.

b. 920,000.

c. 640,000.

d. 988,000