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The Cosby Company has a defined benefit pension plan. On January 1, Year One, a contractual provision was changed and the projected benefit...

  • The Cosby Company has a defined benefit pension plan. On January 1, Year One, a contractual provision was changed and the projected benefit obligation increased at that moment by $400,000. Which of the following statements is true?
    • Pension expense is not affected on January 1, Year One, but is gradually increased over the next several years.
    • Pension expense is increased immediately by $400,000.
    • Pension expense is increased on January 1, Year One, by a portion of the $400,000 with the remaining amount added to pension expense over the next few years.
    • Pension expense is never affected because the $400,000 is retained within accumulated other comprehensive income on the balance sheet.

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-Pension expense is not affected on January 1, Year One, but is gradually increased over the next several years.  This... View the full answer

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Pension expense is... View the full answer

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