Question

The following information pertains to Seda Co.'s pension plan:
Actuarial estimate of projected benefit obligation at January 1, 2017 $72,000
Assumed discount rate 10%
Service costs for 2017 $18,000
Pension benefits paid during 2017 $15,000
If no change in actuarial estimates occurred during 2017, Seda's projected benefit obligation at December 31, 2017 was:___________.
a. $75,000
b. $79,200
c. $82,200
d. $64,200

Answer 1

Answer:

c. $82,200

Explanation:

Calculation to determine what Seda's projected benefit obligation at December 31, 2017 was:

Actuarial estimate of projected benefit obligation at January 1, 2017 $72,000

Add Interest cost $7,200

Add Service costs for 2017 $18,000

Less Pension benefits paid during 2017 ($15,000)

Projected benefit obligation at December 31, 2017 $82,200

Theretore Seda's projected benefit obligation at December 31, 2017 was:$82,200