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On January 2, 2011 Loch Co. established a noncontributory defined benefit plan covering all employees and contributed $1,000,000 to the plan.

On January 2, 2011 Loch Co. established a noncontributory defined benefit plan covering all employees and contributed
$1,000,000 to the plan. At December 31, 2011, Loch determined that 2011 service cost was $510,000, the settlement rate was 11%
and the expected and actual rate of return on plan assets was 10%. There are no other components of Loch's pension expense. What
amount should Loch report on its December 31, 2011 balance sheet as a pension asset?

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