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il63 [147K]
3 years ago
9

The EPBO for a particular employee on January 1, 2021, was $150,000. The APBO at the beginning of the year was $30,000. The appr

opriate discount rate for this postretirement plan is 5%. The employee is expected to serve the company for a total of 25 years with 5 of those years already served as of January 1, 2021. What is the APBO at December 31, 2021?
Business
1 answer:
melomori [17]3 years ago
5 0

Answer:

The APBO at December 31, 2021 is $37,800.

Explanation:

In order to calculate the ABPO at December 31, 2021 we have to use the following formula:

ABPO= EBPO as on December 31, 2021 × ratio period served over aquired

       = ($150,000 × 1.05) × <u>6 years</u>

                                           25 years

       = $157,500× <u>6 years</u>

                           25 years

      = $37,800.

The APBO at December 31, 2021 is $37,800.

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