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Pearsall Company's defined benefit pension plan had a PBO of $270,000 on January 1, 2021. During...

Pearsall Company's defined benefit pension plan had a PBO of $270,000 on January 1, 2021. During 2021, pension benefits paid were $48,000. The discount rate for the plan for this year was 11%. Service cost for 2021 was $86,000. Plan assets (fair value) increased during the year by $51,000. The amount of the PBO at December 31, 2021, was:

Multiple Choice

  • $222,000.

  • $385,700.

  • $337,700.

  • None of these answer choices are correct

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Answer #1
PBO on Jan 1,2021 270,000
Service cost 86,000
Interest (270,000*11%) 29,700
Benefits paid during the year -48,000
PBO on Dec 31,2021 337,700

Option C is the answer

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