The following information pertains to a defined benefit pension plan that Arora Inc. sponsors in 2020.PBO balance, January 1, 2020$160,000Service cost19,000Interest cost11,200Prior service cost adjustment based on past service, January 1, 202030,000Amortization of prior service cost3,000Actuarial gain on PBO6,000Benefits paid to retirees2,500Contributions to plan18,000What is the PBO balance on December 31, 2020?Select one:a. $228,700b. $216,700c. $211,700d. $193,700

d. $193,700. D is the correct answer.

Tollowing information pertains to a defined benefit pensIC PBO balance, January 1, 2020 Service cost Interest cost Prior service cost adjustment based on past service, January 1, 2020 Amortization of prior service cost Actuarial gain on PBO Benefits paid to retirees

Tollowing information pertains to a defined benefit pensIC PBO balance, January 1, 2020 Service cost Interest cost Prior service cost adjustment based on past service, January 1, 2020 Amortization of prior service cost Actuarial gain on PBO Benefits paid to retirees

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 5E

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Question

The following information pertains to a defined benefit pension plan that Arora Inc. sponsors in 2020.
PBO balance, January 1, 2020
$160,000
Service cost
19,000
Interest cost
11,200
Prior service cost adjustment based on past service, January 1, 2020
30,000
Amortization of prior service cost
3,000
Actuarial gain on PBO
6,000
Benefits paid to retirees
2,500
Contributions to plan
18,000
What is the PBO balance on December 31, 2020?
Select one:
a. $228,700
b. $216,700
c. $211,700
d. $193,700

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