Pearsall Company's defined benefit pension plan had a projected benefit obligation (PBO) of $265,000 on January 1, 2021. During 2021, pension benefits paid were $40,000. The discount rate for the plan for this year was 10%. Service cost for 2021 was $80,000. Plan assets (fair value) is $480,000. The expected interest rate is 10%. Plan assets actual increase during the year was $45,000. The amount of the PBO expense recorded in the income statement on December 31, 2021, is: A) $85,000. B) $114,500. C) $151,500. D) $154,500. D) None of these answer choices are correct.

Pearsall Company's defined benefit pension plan had a projected benefit obligation (PBO) of $265,000 on January 1, 2021. During 2021, pension benefits paid were $40,000. The discount rate for the plan for this year was 10%. Service cost for 2021 was $80,000. Plan assets (fair value) is $480,000. The expected interest rate is 10%. Plan assets actual increase during the year was $45,000. The amount of the PBO expense recorded in the income statement on December 31, 2021, is: A) $85,000. B) $114,500. C) $151,500. D) $154,500. D) None of these answer choices are correct.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 6RE

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