As of January 1, 2021, ABC Company's projected earnings obligation (PBO) was $30 million.During the...
90.2K
Verified Solution
Link Copied!
Question
Accounting
As of January 1, 2021, ABC Company's projected earnings obligation (PBO) was $30 million.
During the year, pension benefits paid to retirees by the trust were $5 million.
The 2021 service cost was $10 million.
The pension plan assets generated a return of $4 million during 2021. This is $1 million in excess of the expected return that year.
The net profit/loss account reflected a balance of 0 for the entire year.
The actuary's discount rate was 9%.
At the end of the year, the company awarded retroactive benefits to employees for a total of $2 million.
ABC contributed $7 million to the trust.
The average service period of employees is 10 years.
Requirement:
Determine the Projected Benefit Obligation (PBO) balance as of December 31, 2021 (be sure to clearly label each amount and show all work for calculations)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
