Question

Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PB0 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?

A) $100,000
B) $112,000.
C) $90,000.
D) $107,200.

Answer 1

C) $90,000

Step-by-step explanation:

Beginning PBO = Interest cost/Discount rate =

Beginning PBO = $7,200/8%

Beginning PBO = $90,000