Question

On January 1, year 8, Paul Co.’s defined benefit pension plan had plan assets with a fair value of $750,000, and a projected benefit obligation of $875,000. In addition: Actual and expected return on plan assets – 7% Interest cost – 9% Service costs - $24,000 Unamortized prior service cost - $120,000 Employer contributions to the plan - $45,000 Distributions to employees from the plan - $60,000 Assuming that pension expense is $80,000, what will be the projected benefit obligation at December 31, year 8?

Answer 1

$917,750

Step-by-step explanation:

The beginning projected benefit obligation of $875,000

Add: Increased by interest at 9% or $78,750

Add Service ervice cost of $24,000

Total $977,780

Less distributions to employees $60,000

Balance $917,750

Therefore Assuming that pension expense is $80,000, what will be the projected benefit obligation at December 31, year 8 is

$917,750