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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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