What would be the interest expense on the defined benefit

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Hi-Flie-Ing Corporation offers a defined benefit pension plan to all its eligible employees. The company uses the December 31 year end and uses IFRS to prepare its financial statements. It has reported a credit balance of $1,380,000 as at December 31, 2018 for its Net Defined Benefit Liability/Asset Account. The plan is underfunded by 20% of its Defined Benefit Obligation. The company also recorded, during 2019, $200,000 as Past Service Costs which were assumed to have accrued on January 1, 2019.

Problem 1: The company determines its interest expenses and benefits on the balance existing at the beginning of the year. You are told that the company recorded $386,400 as the expected returns on Plan Assets for the year. $546,000 were recorded as current services costs during 2019. What would be the interest expense on the Defined Benefit Obligation for 2019?

a. $497,000.
b. $96,000.
c. $483,000.
d. $200,000.
e. Cannot be determined with the given information.

Reference no: EM132972137

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