Question

The following information pertains to the Moonlight Company pension plan:

employer contribution.............. $2,800

project benefit obligation at 1/1 .......$72,000

Assumed discount rate..........10%

service cost for the year.......18,000

pension benefits paid during the year....35,000

If no change in actuarial estimates occurred during the year, Moonlight's projected benefit obligation at December 31 of the current year was:

Select one:

a. $62,200

b. $65,000

c. $79,200

d. $82,200

e. $59,400

Answer 1

Answer
The Correct Option is A : $ 62,200
Explanation
Actuarial estimate of projected benefit obligation	$           72,000
Service Cost	$           18,000
Discount Factor(72000 x 10%)	$             7,200
Less: Benefit Paid	-$          35,000
Projected benefit Obligation Dec 31	$           62,200