Question

Data for 2018 were as follows: PBO, January 1, $240,000 and December 31, $270,000; pension plan assets (fair value) January 1, $180,000, and December 31, $230,000. The projected benefit obligation was underfunded at the end of 2018 by:

Answer 1

$40,000

Step-by-step explanation:

Data provided

PBO, December 31 = $270,000

Pension plan assets (fair value) December 31 = $230,000

The computation of the projected benefit obligation was underfunded is shown below:-

Projected benefit obligation was underfunded at the end of 2021 = PBO, December 31 - Pension plan assets (fair value) December 31

= $270,000 - $230,000

= $40,000