Buddha Baby ("BB") offers a defined pension plan for its employees and all their babies (and some employees have lots of babies). On January 1, 2025, the pension plan was underfunded by $2,000,000. BB has a December 31 year end. Pertinent details of the pension plan are as follows: pension plan assets market value, January 1 3,150,000 funding of pension plan 250,000 pension benefits earned by evenly through the year 185,000 payments to retirees (and their babies), end of year 95,000 actuarial gains
Buddha Baby ("BB") offers a defined pension plan for its employees and all their babies (and some employees have lots of babies). On January 1, 2025, the pension plan was underfunded by $2,000,000. BB has a December 31 year end. Pertinent details of the pension plan are as follows: pension plan assets market value, January 1 3,150,000 funding of pension plan 250,000 pension benefits earned by evenly through the year 185,000 payments to retirees (and their babies), end of year 95,000 actuarial gains
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Buddha Baby ("BB") offers a defined pension plan for its employees and all their babies (and some employees have lots of babies). On January 1, 2025, the pension plan was underfunded by $2,000,000. BB has a December 31 year end. Pertinent details of the pension plan are as follows:
| pension plan assets market value, January 1 | 3,150,000 |
| funding of pension plan | 250,000 |
| pension benefits earned by evenly through the year | 185,000 |
| payments to retirees (and their babies), end of year | 95,000 |
| actuarial gains | 25,000 |
| discount rate | 8% |
What is ending balance of plan obligation at December 31, 2025?
| a. |
5,634,400 |
b. |
1,314,400 |
c. |
1,360,600 |
d. |
3,474,000 |
e. |
answer not provided |
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