Question

he following information relates to a company’s defined benefit pension plan at December 31:

Accumulated benefit obligation: $1,035,000
Projected benefit obligation: 1,250,000
Prior service cost: 113,000
Net gain on plan assets: 167,000
Plan assets (fair value): 737,000

What amount should the company report as its pension liability at December 31?

Answer 1

Answer:

$298,000

Explanation:

This is the difference between the accumulated benefit obligation and fair value of plan assets on December 31 ($1,035,000 less $737,000).