Chapter 19, Problem 19.27BE

To determine

The value of pension asset or pension liability at the balance sheet date at the end of year.

Given information:

PBO at the beginning is $900,000.

Service Cost is $350,000.

Pension benefits paid is $210,000.

Contribution into the plan is $85,000.

Fair value of plan assets at the beginning of the year is $865,000.

Return on plan assets is $100,000.

Settlement rate is 5%.