Question

Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $110,000; benefits paid to retirees, $10,000; interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO

Answer 1

Beginning projected benefit obligation = $90,000

Step-by-step explanation:

Beginning projected benefit obligation = Interest cost / Discount rate

=$7,200 / 8%

=$7,200 / 0.08

=$90,000