Chapter 19, Problem 19.5MC

To determine

To identify: The correct option.

Given information:

Projected benefited obligation(PBO) as on December 31, Year 7 is $2,000,000.

Projected benefited obligation(PBO) as on December 31, Year 8 is $2,220,000.

Fair value of plan assets as on December 31, Year 7 is $1,750,000.

Fair value of plan assets as on December 31, Year 8 is $2,025,000.

Unrecognized prior service cost as on December 31, Year 7 is $500,000.

Service cost of Year 8 is $200,000.

Expected benefits payable for Year 9 is $400,000.

Discount rate is 6%.

Expected rate of return on plan assets is 8%.

Remaining service life is 10 years.