Question

Pearsall Company's defined benefit pension plan had a PBO of $271,000 on January 1, 2021. During 2021, pension benefits paid were $46,000. The discount rate for the plan for this year was 8%. Service cost for 2021 was $88,000. Plan assets (fair value) increased during the year by $55,000. The amount of the PBO at December 31, 2021, was:

Answer 1

The amount of the PBO at Dec 31,2021 334,680

Step-by-step explanation:

PBO on Jan 1,2021 271,000

+ Service cost 88,000

+ interest (271,000 x 8%) 21,680

- pension benefits paid -46,000

PBO at Dec 31,2021 334,680