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13 April, 08:39

Data for 2021 were as follows: PBO, January 1, $240,000 and December 31, $270,000; pension plan assets (fair value) January 1, $180,000, and December 31, $230,000. The projected benefit obligation was underfunded at the end of 2021 by:

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  1. 13 April, 10:35
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    The projected benefit obligation was underfunded at the end of 2021 by: $40,000

    Solution:

    Given,

    PBO, January 1, $240,000

    December 31, $270,000

    pension plan assets (fair value) January 1, $180,000

    December 31, $230,000

    Now,

    The projected benefit obligation was underfunded at the end of 2021 by:

    PBO ($270,000)

    Plan assets 230,000

    Funded status ($40,000) [ $270,000 - 230,000 ]

    ∴ The projected benefit obligation was underfunded at the end of 2021 by: $40,000
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